Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

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Thursday, 10 March 2016

RECOMMENDATIONS FOR PRODUCTIVITY IMPROVEMENT

PRODUCTIVITY BOARD FOR INDUSTRIAL MACHINERY
(National Productivity Council)

RECOMMENDATIONS FOR PRODUCTIVITY IMPROVEMENT

TASK-FORCE REPORT

H.C. PAREKH
General Manager
LARSEN & TOUBRO LIMITED
TASK FORCE CO-ORDINATOR

RECOMMENDATIONS FOR PRODUCTIVITY IMPROVEMENT

TASK-FORCE REPORT
JUNE 1986

FOREWORD

The Central Advisory Council for Industries in its meeting held on August 23, 1982 observed that the status of productivity and growth in some of the key sectors of industrial activity such as Machine Tools, Industrial Machinery, Power Equipment, Cement etc., has a vital role to play in national economic development. It therefore recommended that the Government of India set up industrywise Productivity Boards. Accordingly, seven industry-wise Productivity Boards were constituted by the Ministry of Industries, Department of Industrial Development. The Union Minister for Industry and President of NPC, Shri Narayan Dutt Tiwari, inaugurated the Boards in August 1983. The Secretariat for the Boards is provided by the National Productivity Council.

The objectives set for the Productivity Boards are as follows:

-- To prepare plans incorporating technology, manpower, energy and marketing for achieving higher productivity and to integrate the same with the national economic plans.

-- To identify productivity constraints, with a view to advising the government, industry and trade unions on the measures to be taken to overcome the bottlenecks.

-- To monitor the implementation of productivity plans, to evaluate the actual results achieved and to identify the specific factors that have helped or hindered realisation of higher productivity.

-- To advise the Government on policy issues such as establishing industrywise norms for major inputs or factors affecting production, linking wages with productivity, instituting productivity awards for higher performance, etc.

-- To establish a standard data base for evaluating productivity performance and to promote participative culture, environment-conscious management, harmonious labour-management relations and productivity agreements.

The Membership of the Boards has a tripartite character and includes representatives of the Government, the Public/Private Sectors and the Trade Unions.

In April 1984, the Board for Industrial Machinery, set up a Central Task Force to study in depth the problems faced by the enterprises in the Industrial Machinery Sector and to collect enterprise level data on productivity norms and indicators used in the industry.

This was collected by four regional task force committees. The participation included leading industrial organisations, Regional AIEI offices, Local Productivity Councils and the National Productivity Council. On the basis of data collected from 53 industrial enterprises covering about 100 plants spread over the length and breadth of the country, the Central Task Force compiled a report on “INTER-FIRM PRODUCTIVITY SURVEY”. This initial report of the task force was presented to Shri Veerendra Patil, the then Minister for Industry on September 23, 1985. The Minister advised the Board to take up the task of preparing a set of recommendations for productivity improvement for the consideration of Government agencies, professional bodies and industry associations.

The Board in turn, entrusted the task of framing preliminary recommendations to the Central Task Force. The draft report submitted by the Task Force was adopted after due deliberation on February 19, 1986. The Board further suggested to the Task Force that the good practices followed by professionally managed companies be compiled. This, the Board felt, would induce others to follow these practices and also help spread the productivity culture. The practices have been incorporated in the yellow pages of this report while the recommendations of the Board are contained in the white pages. The Task Force is to be congratulated on the efforts made.

It is hoped that the implementing agencies will initiate immediate action on the recommendations.

(Signature)
N. M. DESAI
Chairman
Productivity Board for Industrial Machinery

June – 1986

LIST OF BOARD MEMBERS AND CO-OPTED MEMBERS

NAME | ADDRESS

  1. Shri N. M. Desai (Chairman)
    Chairman & President
    Larsen & Toubro Limited
    L&T House, Ballard Estate
    Bombay – 400 038
  2. Dr. A. N. Saxena
    Director General
    National Productivity Council
    Lodi Road, New Delhi – 110 003
  3. Shri P. R. Latey
    Director General, DGTD
    Udyog Bhavan
    New Delhi – 110 011

Alternate:

  • Shri Laxman Misra – Industrial Adviser
  • Shri A. K. Sen – Industrial Adviser
  1. Shri K. R. Parmesvar
    Adviser (I & M)
    Planning Commission
    Yojana Bhavan
    New Delhi – 110 001
  2. Shri S. C. Dhingra
    Adviser (Tech.) & Ex-Officio Joint Secretary
    Department of Heavy Industry
    Udyog Bhavan
    New Delhi – 110 011
  3. Shri A. K. Srivastava
    Director, Ministry of Labour
    Shram Shakti Bhavan
    Rafi Marg
    New Delhi

Alternate:

  • Shri A. Gupta – Jt. Secretary

 

scan0006.jpg

  1. Shri G. Raman
    Industrial Adviser
    Office of DCSSI
    Nirman Bhavan
    Maulana Azad Road
    New Delhi – 110 011.

Alternate:
Shri A. N. Ghosh – Industrial Adviser

  1. Shri S. R. Chaudhary
    Chairman & Managing Director
    Jessop & Co. Ltd.
    63, Netaji Subhas Road
    Calcutta – 700 001.
  2. Shri M. R. Naidu
    Chairman & Managing Director
    Bharat Heavy Plates & Vessels Ltd.
    Visakhapatnam – 530 012.
  3. Shri Sumant J. Patel
    Vice Chairman & Managing Director
    New Standard Engineering Co. Ltd.
    NSE Estate, Goregaon East
    Bombay – 400 063.
  4. Shri S. N. Vajpai
    Chairman & Managing Director
    Heavy Engineering Corpn. Ltd.
    Ranchi – 834 084 (Bihar)
  5. Dr. N. A. Kalyani
    Chairman
    Bharat Forge
    Mundhwa, Pune Cantt.
    Pune – 411 036.
  6. Shri V. L. Doshi
    Chief Executive
    Walchandnagar Industries Ltd
    Construction House
    Ballard Estate
    Bombay – 400 038.
  7. Shri Ram Sen
    11/5 Andul 2nd bye-lane
    P.O. Botanical Gardens
    Howrah – 711 103.
  8. Shri T. D. Singh
    General Secretary
    Heavy Electricals Shramik Trade Union
    Qr. No. 812/N/2 Sector K
    Piplani, Bhopal.
  9. Shri Lal Bahadur Singh
    General Secretary
    INTUC Bengal Branch
    177/B Acharya Jagdish Bose Road
    Calcutta – 700 014.
  1. Shri K. J. Thakkar
    General Secretary
    BMS, Gujarat State
    Shastri Pole
    Vadodara – 390 001.
  2. Shri S. A. Khader
    Director (Productivity Planning)
    National Productivity Council
    Lodi Road
    New Delhi – 110 003.

CO-OPTED MEMBERS

  1. Shri R. K. Daga
    Vice President
    Hindustan Motors Ltd
    Earth Moving Equipment Divn.
    P.O. Melanallathur 602 004
    Tiruvallur (Tamil Nadu)
  2. Shri S. K. Bijlani
    Managing Director
    Molins India Ltd
    A/7 Ind. Estate
    Mohale, Chandigarh
    Punjab – 160 051.
  3. Shri R. N. Prasad
    Asst. General Manager
    Tata Engg. & Loco. Co. Ltd.
    21 Karkai Road (Nildih)
    Jamshedpur – 830 190
  4. Shri A. V. Dandekar
    Group General Manager
    Jyoti Ltd
    P.O. Chemical Industries
    Baroda – 390 003.
  5. Shri H. C. Parekh
    General Manager
    Larsen & Toubro Limited
    Powai Works
    P.O. Box No. 8901
    Saki Vihar Road
    Bombay – 400 072.
  6. Dr. D. F. Pereira
    Jt. General Manager
    Larsen & Toubro Limited
    Powai Works
    P.O. Box No. 8901
    Saki Vihar Road
    Bombay – 400 072.

TASK FORCE MEMBERS

  1. Shri H. C. Parekh – L&T (Co-ordinator)
  2. Dr. A. N. Saxena (Represented by Shri S. A. Khader) – NPC
  3. Shri Ram Sen – AITUC
  4. Shri K. R. Parmesvar – Planning Commission
  5. Shri Vinod Doshi – AIEI

ACTIVITIES OF THE PRODUCTIVITY BOARD

In pursuance of the objectives, the Productivity Board for Industrial Machinery has so far met 11 times and planned and executed the following tasks:

a) It has been able to generate considerable productivity awareness and consciousness in the industry by organising the following four National Workshops. In particular, it has been able to focus attention on specific problems of Industrial Machinery Sector namely Technology Upgradation and Motivation for Productivity. In all, over 500 delegates from Industrial Machinery Sectors have participated in the Workshops.

S. No.

Theme

Date & Place

1

Improving Industrial Productivity

16–17 Dec. 1983, Bombay

2

Productivity Improvement in Industrial Machinery Sector

23 May, 1984, New Delhi

3

Motivation for Productivity

21–22 Jan. 1985, Madras

4

Technology Innovation and Modernisation

23–24 Sept. 1985, New Delhi

b) The Board constituted a task force to study in depth the problems faced by the enterprises in this sector and to collect enterprise level data on Productivity Norms and Productivity Indicators used in the industry. This study covered over 60 undertakings that analysed the problems faced in respect of productivity improvement at the shopfloor level. A report entitled "Inter-firm productivity Survey" was brought out by the task force and submitted to the Government. The recommendations that are evolved in this report have emanated from this task force study.

c) The Board brought out a report on the "Status of Productivity in the Industrial Machinery Manufacturing Sector" through a research team for submission to the Government.

d) Other Activities:

The Board discussed a model of productivity-linked reward scheme for wider propagation.

The Board plans to bring out:
(a) case-studies in the form of success stories and booklets for propagation of productivity message, based on industry experience
(b) films and audio-visual aids

Towards this, expertise of Shri M. K. Rustonji has been sought and an abridged version of the book "The Incredible Japanese" is being brought out in regional languages for the benefit of Indian workers.

CONTENTS

Foreword – V
List of Board Members – VII
Activities of the Board – XI

PART ONE: ENTERPRISE LEVEL PRODUCTIVITY PRACTICES

Chapter 1: Manufacturing and Engineering

  1. Designer–Process Engineer Interaction – 1
  2. Productivity Indicators – 1
  3. Fixing of Targets – 2
  4. Low Cost Automation – 2
  5. MTM & PMTS – 2
  6. Computer Aided Design and Manufacture – 2

Chapter 2: Manufacturing Services

  1. Quality Assurance – 5
  2. Organisation & Methods (O&M) – 5
  3. Computer Applications – 10
  4. Safety – 11
  5. House-keeping – 12

Chapter 3: Infrastructure

  1. Plant Layout & Material Handling System – 13
  2. Transport – 13

Chapter 4: Marketing

  1. Sales Network – 15
  2. Loyalty to Stockists – 15

Chapter 5: Finance

  1. Timely Payment to Suppliers – 17
  2. Management Planning & Control Systems – 18
  3. Transfer Pricing – 19
  4. Capital Expenditure – Budgeting & Control – 21

Chapter 6: Materials & Ancillary

  1. Inventory Control – 23
  2. Vendor Rating – 23
  3. Source Development – 23
  4. All India Inventory Reporting – 23
  5. Standardization within Industry – 24
  6. Codification – 24
  7. Value Engineering – 25
  8. Packaging – 26

Chapter 7: Human Resource

  1. Human being – The central figure – 27
  2. Recruitment Policy – 27
  3. Training Schemes for Engineers – 27
  4. Training Schemes for Trade Apprentices – 29
  5. Training Scheme for Welders – 29
  6. Other Training Schemes – 30
  7. Workers’ Education Scheme – 31
  8. MIS – 31
  9. Performance Appraisal – 32
  10. Industry–Institute Interaction – 32
  1. Suggestion Scheme – 33
  2. Employee Welfare – 34
  3. Housing Scheme – 35
  4. Community Welfare – 35
  5. Credit Society – 36
  6. Culture & Values – 36
  7. Strategies for the Next Decade – 37
  8. Project "WARM" – 38

PART TWO: TASK FORCE RECOMMENDATIONS

Chapter 8: Recommendations

  1. Summary – 43
  2. Immediate Implementation – 55
  3. Short Term Implementation – 87
  4. Long Term Implementation – 135

LIST OF ANNEXURES

  1. Production/Productivity Linked Wage Scheme – 165
  2. Productivity Measurement Ratios – 169
  3. Extract from Statement of Policy – 177
  4. Vendor Registration Application – 179
  5. Approved Revised Syllabus for Workers’ Education Programme – 183
  6. Performance Appraisal Form – 187
  7. The New Horizon "The Warm" – 191

ENTERPRISE LEVEL PRODUCTIVITY PRACTICES

1. MANUFACTURING AND ENGINEERING

1.1. DESIGNER–PROCESS ENGINEER INTERACTION

To improve manufacturing productivity, it is not enough if manufacturing methods alone are made productive. The engineering must also be continuously updated and improved upon.

Before a product is released for manufacture (i.e., a product of one's own design or a product with foreign know-how), structured meetings should be held to discuss manufacturability, marketability, cost aspects, etc. The concerned personnel should take part in the discussions and any changes necessary to suit manufacturability and aid productivity should be incorporated. A continuous interaction between product designers and process engineers should be maintained right from the conceptual stage of the product.

1.2. PRODUCTIVITY INDICATORS

All efforts to improve productivity will be meaningless if there are no means of measuring productivity. Some important productivity indicators are:

1.2.1. Labour Productivity Index

Measured as ratio of output (standard hours) to clocked time. Calculated daily per workman with summaries weekly/monthly. Requires good work measurement and standard time fixation.

1.2.2. Indirect Labour

Measured via indicators such as value of goods dispatched, number of cases packed, etc.

1.2.3. Down-time

Loss of production hours due to breakdowns, tool settings, etc. Measured using “Coverage Factor”.

1.2.4. Utilisation of Expensive Capital Equipment

Measured as number of operating hours available on machines. Monthly utilisation statements prepared.

1.3. FIXING OF TARGETS

Targets should be fixed annually with at least 5% improvement over previous year. Data should be computerized and shared regularly.

1.4. LOW COST AUTOMATION

Includes:

  • Pneumatic circuits
  • Automatic feeding/loading/unloading
  • Conveyors in assembly lines

1.5. MTM & PMTS

Implementation via:

  • Training engineers
  • Exposure to techniques
  • 5–6 week intensive training
  • Worker participation
  • Training facilities

1.6. COMPUTER-AIDED DESIGN AND MANUFACTURE

Programs include design, graphics, and NC programming.

1.6.1. CAD

  • Multi-chamber tower design
  • Beam loads
  • Heat exchangers

1.6.2. Interactive Graphics

  • Curve development
  • Tube sheet layouts
  • Stress analysis
  • Plant layouts
  • Drafting
  • PCB layouts

1.6.3. CAM

  • CNC drilling optimization
  • Nesting of shapes
  • Sheet metal blanking

2. MANUFACTURING SERVICES

2.1. QUALITY ASSURANCE

Ensures product quality from concept to commissioning. Includes:

  • Engineering
  • Design
  • Procurement
  • Inspection
  • Documentation

QA manual defines policies and responsibilities.

2.2. ORGANISATION AND METHODS (O&M)

2.2.1. Systems and Procedures

Steps:
a) Define scope
b) Collect data
c) Prepare flow charts

Continuation:

d) Analyse and propose alternatives
e) Get approvals
f) Issue final procedure
g) Follow-up implementation

2.2.2. Form Design and Control

Goal: Reduce clerical work

Steps include:

  • Form requisitions
  • Maintain index
  • Review forms
  • Improve design
  • Printing specifications
  • Retention planning

2.2.3. Filing Systems

Maintain central record room

Includes:

  • File inventory

Continuation of filing systems:

  • Scrutinizing
  • Destruction
  • Removing unwanted papers
  • Indexing
  • Filing procedures

Result:

  • 70% file reduction
  • 60% space saved

2.2.4. Paper Destruction Case

Steps:

  • Committee formation
  • Brainstorming
  • 30% reduction target
  • Sub-committees
  • Approval and destruction

Results:

  • 50 tonnes destroyed
  • 300 sq.m space saved
  • 15 racks emptied

2.2.5. Central Word Processing

Benefits:

  • Reduces typing load
  • Document storage
  • Departmental libraries

2.2.6. Microfilming

Goals:

  • Reduce storage
  • Maintain confidentiality

Steps:

  • Microfilm reports
  • Indexing
  • Duplicate copies
  • Safe storage

Result: 80% space reduction

2.2.7. Electronic Attendance System

  • Card-based system
  • Central processing
  • Automated payroll

Advantages:

  • Reduced clerical work
  • Instant access

2.2.8. Cost Saving Communication

Steps:

  • Identify savings
  • Analyse data
  • Prepare pamphlets

Examples:

  • “Talk is not cheap”
  • “Reduce your Stationery Cost”
  • “Cut your Telex Cost”

2.2.9. Training Programme

Includes:

  • Communication
  • Correspondence
  • Record keeping
  • Work simplification
  • Productivity systems

2.3. COMPUTER APPLICATIONS

2.3.1. Finance

  • Payroll system
  • Marketing info system
  • Invoicing
  • Customer outstanding
  • Supplier accounting
  • Asset accounting
  • Fixed deposits

2.3.2. Materials

  • Materials planning
  • Inventory systems
  • Replenishment
  • Finished goods
  • Vendor master

2.3.3. Planning & Costing

  • Job costing
  • Shop reporting
  • Project management

2.3.4. Human Resources

  • Manpower Information System
  • Training Requirements Planning

2.4. SAFETY

Main functions:

  • Accident Prevention
  • Fire Prevention
  • Safety Awareness

2.4.1. Engineering

  • Safety systems planning
  • Safety audits
  • Protective measures

2.4.2. Enforcement

Compliance with:

  • Factories Act
  • Insurance Rules
  • Explosive Rules
  • Gas Cylinder Rules
  • Municipal Act

2.4.3. Education

  • Training programs
  • First aid
  • Traffic safety
  • Posters & sign boards
  • Newsletters
  • Fire drills

2.4.4 Enthusiasm:

Generate enthusiasm through:

  • Safety contests
  • Slogan and essay competitions
  • Safety day celebrations

2.4.5 Safety Committee:

There should be a Safety Committee with union representatives as members so that their participation is possible.

2.5 HOUSE KEEPING

Good house-keeping is a matter of attitude and is developed through general awareness at all levels. The following are simple practices that help in these efforts:

2.5.1 Development of the correct attitude:

Housekeeping is everybody's business. Everyone should understand and practice it. Advantages include:

  • Improved efficiency
  • Safe working conditions
  • Lower operating costs
  • Better use of floor space

2.5.2 Responsibilities:

Each person is accountable for housekeeping of their work area. Supervisors must lead by example.

2.5.3 Making it easy:

  • Provide waste baskets
  • Provide brushes to keep machines clean
  • Provide storage space

2.5.4 Prevention:

  • Plug leaks in time
  • Use trays to collect chips

2.5.5 Participation:

Encourage suggestions and organize housekeeping contests.

3. INFRASTRUCTURE

3.1 Plant Layout & Material Handling

Systematic layouts should integrate all activities from raw material receipt to finished goods dispatch. Infrastructure should include:

  • Power generation & distribution
  • Water supply
  • Drainage
  • Effluent treatment
  • Fuel storage
  • Ventilation, lighting
  • Telecommunication
  • Roads, security, medical facilities, etc.

Material handling must support both current and future operational volumes.

3.2 Transport

Though not mandatory, providing transport:

  • Improves efficiency
  • Ensures timely reporting
  • Reduces travel hardship
  • Saves employee time

4. MARKETING

4.1 Sales Network

Companies should maintain their own sales network to:

  • Assist stockists
  • Guide sales efforts

Structure includes:

  • Sales engineers
  • Supervisors
  • Representatives

Functions:

  • Identify customer needs
  • Promote products
  • Assist stockists
  • Handle complaints

Sales teams should also provide market feedback.

4.2 Loyalty to Stockists

  • Company must show loyalty to stockists
  • Work closely and treat them as partners
  • Avoid direct competition with stockists
  • Provide technical support
  • Ensure fair returns

After-sales service should be provided by the company if stockists cannot.

5. FINANCE

5.1 Timely Payment to Suppliers

Payment methods include:

  • Advance payments
  • Payment against delivery
  • Bank documents
  • Hundis
  • Credit notes

System should be computerized.

Requirements:

a) Documents must be verified
b) A Computer Cell should check accuracy

5.1.1 Bill Passing

  • Bills verified with GRN and PO
  • Statements generated:
    • Purchase Register
    • Sales Tax Register
    • Supplier Ledger

Computerization improves speed and accuracy.

Prompt payments build supplier confidence.

Up-to-date status of pending bills must be available.

5.1.2 Meeting Suppliers

Regular meetings:

  • Build confidence
  • Provide feedback
  • Improve payment systems

5.2 Management Planning & Control System (MPCS)

5.2.1 Aims:

  • Ensure top management involvement
  • Enable decentralized planning
  • Encourage participation
  • Monitor performance vs budget

Managers must include productivity targets.

5.2.2 Budgeting Process

  • Starts with corporate guidelines
  • Prepared at operating levels
  • Reviewed and consolidated
  • Approved budgets broken monthly

Monthly reviews help identify problems.

5.3 Transfer Pricing System

5.3.1 Concept:

Factory operates at no profit/no loss.
Marketing Division earns profit.

Transfer Price = Total factory cost

5.3.2 Contents:

Product Cost:

  • Direct material
  • Direct labour
  • Direct expenses
  • Material overheads
  • Shop overheads

Service Overheads:

  • PPC
  • Work study
  • R&D
  • Purchase
  • Accounts
  • Labour

Transfer prices:

  • Set annually
  • Reviewed quarterly if cost changes >3%

5.3.4 Cost Variance:

  • Compare actual vs transfer price
  • Identify inefficiencies
  • Separate controllable/uncontrollable factors

Under-recovery not passed to Marketing Division.

5.3.5 Profit:

  • Marketing sells goods and earns margin
  • Profit = Sales price – Transfer price – Marketing expenses
  • Total company profit = Sum of division contributions

5.4 Capital Expenditure Budgeting & Control

5.4.1 Stages:

  • Decide total capital budget
  • Prepare appropriation list
  • Quarterly sanction
  • Execution
  • Control
  • Monthly reporting

5.4.2 Quarterly Sanction:

  • Proposals reviewed technically & financially
  • Approved by Capital Budget Committee
  • Includes machinery or construction

5.4.3 Commitment of Funds:

  • Prepare requisitions
  • Include specifications & timelines
  • Purchase department executes orders

5.4.4 Execution:

  • Equipment inspection before & after installation
  • Civil work certified by architect

5.4.5 Control:

Equipment:

  • Budget check before purchase
  • 6-month utilization report

Civil Works:

  • Bi-monthly cost review
  • Monitor overruns

5.4.6 Monthly Reporting:

  • Report actual & planned cash flow
  • Submit to Capital Budget Committee

Objectives:

  • Monitor cash flow
  • Ensure funding availability

6. MATERIALS & ANCILLARY

6.1 Inventory Control

  • Use ABC analysis
  • Define inventory norms
  • Monthly review of ‘A’ items

6.2 Vendor Rating

  • Rate vendors every 6–12 months
    Criteria:
  • Rejection frequency
  • Delivery adherence
  • Quantity accuracy

6.3 Source Development

  • Identify new vendors
  • Develop them into regular suppliers
  • Treat vendors as partners

Quarterly publication to share:

  • New products
  • New vendors

6.4 All India Inventory Reporting

  • Annual budgets prepared
  • Monthly comparison of actual vs budget
  • Corrective action taken

Responsibility:

  • Materials Managers (raw materials)
  • Production Managers (WIP)
  • Divisional Managers (finished goods)

6.5 STANDARDIZATION WITHIN INDUSTRY

Standardization, which is organized movement, is becoming a predominant feature of present day industrial civilization. Standardization is not intended to bring drabness or monotony into our lives. It is intended to reap substantial economic benefit through a systematic approach to any given problem.

The main aims of Standardization are:
i) to reduce material overhead costs
ii) to make procurement easy and improve reliability of supplies
iii) to improve level of quality of procured materials
iv) to reduce unit cost of procured materials
v) to improve communication between the company and suppliers

How Standardization can boost productivity?

In large organizations, the overheads are generally high. Time saved in labour contributes directly to increased productivity. Next to the human force, cutting tools aid in production. By proper selection of cutting tools, considerable man-hours can be saved.

Examples include tool bits, hacksaw blades, grinding wheels, etc., where parameters like hardness, geometry, grit size, speed, etc., must be standardized.

6.6 CODIFICATION

Material cost in Indian Industry is estimated to be about 60% of production cost.

Inventory control depends on variety reduction through classification/codification.

A 10-digit coding structure is used:

Material Coding Structure

First digit: General category

  • Capital goods
  • Spare parts
  • Raw materials
  • Consumables
  • Components

Second & Third digits: Type of material

  • Structural steel
  • Carbon steel
  • Alloy steel
  • Copper
  • Plastics

Fourth & Fifth digits: Form

  • Round
  • Square
  • Hexagon
  • Flat

Sixth & Seventh digits: Specification

  • Structural quality
  • Commercial quality

Eighth–Tenth digits: Actual size

6.7 VALUE ENGINEERING

Materials account for ~60% of cost and ~90% working capital.

Value analysis focuses on:

  • Functional utility
  • Cost reduction
  • Performance improvement
  • Import substitution
  • Conservation of materials

6.8 PACKAGING

Aim: Effective packaging at low cost

Achieved through:

  • Proper material selection
  • Standardization of sizes
  • Waste reduction
  • New applications of materials
  • Unitisation

Packaging personnel must stay updated with new developments.

7. HUMAN RESOURCE

7.1 HUMAN BEING – THE CENTRAL FIGURE

Human resources are the most critical factor of productivity.

Organizations must:

  • Remove obstacles
  • Improve focus
  • Enhance job satisfaction

7.2 RECRUITMENT POLICY

  • Objective selection (no subjectivity)
  • Use of Psychological, IQ, Trade Tests
  • Clear job descriptions
  • Multi-level evaluation
  • Structured interview panels

7.3 TRAINING SCHEME FOR ENGINEERS

  • Focus on learning by doing
  • On-the-job training
  • Leadership & managerial skill development

Graduate Engineer Trainee (GET)

  • Duration: 2 years
  • Two types:
    • Rotational (R)
    • Specific (S)

Other Schemes

  • PGET (1 year)
  • SST (2 years for diploma engineers)

Appraisal

  • Quarterly evaluations
  • Counseling & guidance

Diploma Engineer Trainee (DET)

Training in:

  • Design
  • Production
  • Welding
  • Industrial Engineering
  • Marketing

7.4 TRAINING SCHEME FOR TRADE APPRENTICES

  • Basic + on-the-job training
  • Supported by classroom teaching
  • NCVT certification

Commercial trades:

  • Clerical
  • Book-keeping
  • Store-keeping

7.5 TRAINING SCHEME FOR WELDERS

Eligibility:

  • Semi-skilled grade
  • Min. VIII Std.
  • Min. 7 years experience

Welder Training Details

  • 1.5 hrs/day for 3 months
  • After working hours
  • Includes theory + practical

Progress-based continuation (up to 6 months)

Post-training:

  • Assigned welding work
  • Promotion based on skill

7.6 OTHER TRAINING SCHEMES

  • Personnel training (1.5 years)
  • Structured on-the-job training

Collaboration programs:

  • Student training (Engineering/Polytechnic)
  • Teacher training
  • CA student training
  • Scholarships
  • Industrial visits

7.7 WORKERS’ EDUCATION SCHEME

Goal:

  • Develop disciplined workforce
  • Build organizational loyalty

7.8 MANPOWER INFORMATION SYSTEM (MIS)

Functions:

  • Store & update manpower data
  • Aid decision-making

Categories:
a) Personal history
b) Wages/increments/transfers
c) Performance appraisal
d) Manpower planning
e) Leave & discipline
f) Personal changes
g) Separations

7.9 PERFORMANCE APPRAISAL

Based on:

  • Joint objective setting

Evaluates:

  • Strengths & weaknesses
  • Growth potential
  • Training needs

Requires:

  • Trained supervisors
  • Continuous feedback

7.10 INDUSTRY–INSTITUTE INTERACTION

Gap exists between industry & academia.

Benefits to Students:

  • Better curriculum interest
  • Improved application skills
  • Industry exposure

Benefits to Industry:

  • Easier recruitment
  • Reduced training cost
  • Faster innovation

Benefits to Faculty:

  • Industry exposure
  • Better teaching quality

Areas of Interaction Between Industry & Institutes

For Students:

  1. Live projects
  2. Vacation training
  3. Career guidance
  4. Industry experts teaching

For Industrial Staff:

  1. Sponsored PG education
  2. Continuing education

For Faculty:

  1. Sponsored projects
  2. Industry assignments
  3. Consultancy

Miscellaneous:

  • Textbooks
  • Curriculum development
  • Creation of chairs/centres

7.11 SUGGESTION SCHEME

A successful suggestion scheme requires:

  • Strong communication between workers & management
  • Employee involvement
  • Sense of belonging
  • Organizational pride

7.12 EMPLOYEE WELFARE

Competition in the market is increasing and becoming fierce. Organisations can counter this only by reducing costs of production, improving quality, adhering to delivery schedules and offering better after-sales service.

To achieve this, all areas of operations need to be improved through efficient working and in this, the suggestion scheme has a very vital role to play.

A good suggestion scheme should activate workmen to make suggestions towards enhancing work efficiency.

The important thrust of the Suggestion Schedule is the method of awarding and recognizing the suggestions made. In short, direct benefits of the Scheme will result in:

  • boosting morale
  • making workmen think
  • effecting better communication between Management and workmen
  • improving human relations
  • improving employee involvement
  • making identification of the problems easier

In an under-developed economy with low productivity, mass poverty and heavy unemployment, the Corporate social responsibilities for welfare of the employees increase manifold.

Most of the labour welfare activities today are prompted and reinforced by legislations. Their aims are to improve health, safety and efficiency of the workmen in the work setting. A time has come to widen the scope of labour welfare to cover the all-round well being of the employees not only as members of industrial and commercial undertakings but also as members of society at large.

It is recommended that the welfare facilities to be extended to the employees be promoted by scientific assessment of needs of the employees and not merely by spirit of philanthropy and charity.

The welfare benefits suggested are:

  • Medical services to employees and their families
  • Co-operative Credit Societies
  • Consumers’ Co-operative Societies
  • Transport
  • Canteen
  • Protective Safety gear & uniforms
  • Libraries
  • Recreational and cultural activities like Sports, Picnics for small groups etc.
  • Workers' Education Classes
  • Counselling and guidance services to employees by trained counsellors
  • Rehabilitation of widows through a co-operative society

The list is only illustrative. It is expected that the organisation's interests and investment in employees through Welfare schemes will yield rich dividends in terms of improved industrial relations and promotion of Company loyalty.

7.13 HOUSING SCHEME

Provision of housing will be the most emotive issue in the Management–Union equation.

In established urban centres, organisations may not be able to provide housing. Instead, they should assist in:

  • procurement of land
  • services of architects

In new setups, housing colonies with:

  • recreational facilities
  • fair price shops
  • medical centres
    should be provided and included in project cost.

7.14 COMMUNITY WELFARE

Industries should extend welfare beyond employees to the community by:

  • supporting voluntary organisations
  • sponsoring funds
  • giving grants

Other activities:

  • sports for handicapped
  • support for destitute children
  • public medical services
  • family planning

For rural factories:

  • schools
  • medical centres
  • balwadis

7.15 CREDIT SOCIETY

  • Promote thrift and savings
  • Help employees with emergency loans

Recommendations:
a) Form Co-operative Credit Society
b) Encourage employee membership

Key principles:

  • Independent functioning
  • Managed by workmen
  • Training ground for management

Industries should:

  • provide infrastructure
  • support mechanisation and computerisation

7.16 CULTURE & VALUES

Industrial organisations shape society and must nurture:

  • Pragmatism
  • Co-operation
  • Sensitivity
  • Adaptability
  • Fairness
  • Loyalty and dedication
  • Entrepreneurship
  • Consistency
  • Self-sufficiency
  • Discipline

Additional values:

  • Clarity
  • Credibility
  • Adherence to law

Examples:
a) No bribery culture
b) Social commitment (pollution, family planning)

7.17 STRATEGIES FOR THE NEXT DECADE

Study:

  • geographical spread
  • product range
  • manufacturing processes
  • strengths & weaknesses
  • employee skills

Future decisions:

  • new factories
  • mergers
  • takeover of sick units
  • joint ventures

Challenges:

  • eroding work ethics
  • stagnation
  • declining productivity
  • changing skills
  • rising wages
  • surplus manpower
  • militancy

Model Comparison

Old Units vs New Units

Old Units

New Units

Labour Intensive

Capital Intensive

Obsolete Tech

New Technology

Rights Focus

Duties Focus

Centralised

Decentralised

Many hierarchy levels

Few levels

Impersonal relations

Personalised relations

Slow response

Quick response

Input oriented

Output oriented

Strategies:

  • Decentralisation
  • Employee involvement
  • Change in management attitude
  • Workers' education
  • Better communication

SUMMARY OF RECOMMENDATIONS

IMMEDIATE IMPLEMENTATION

Ref. 1.01
Present Situation:
Low cost automation in industry not receiving enough encouragement.

Recommendations:

  • Selected National Centres should develop suitable programmes for promotion.
  • The Government to promote manufacture and to give suitable publicity.

Agency: Ministry of Industry, GOI, NPC & Industries
Page No.: 57

Ref. 1.02
Present Situation:
Lack of desired thrust towards in-house R&D efforts.

Recommendations:

  • Incentives where spending exceeds 2% and disincentives where it is less.

Agency: DSIR & Ministry of Finance, GOI
Page No.: 58

Ref. 1.03
Present Situation:
No weighted tax deduction for expenditure incurred on sponsored research conducted through approved research bodies.

Recommendations:

  • Policy of weighted tax deduction withdrawn in the current Finance Act should be restored.

Agency: DSIR & Ministry of Finance, GOI
Page No.: 59

Ref. 1.04
Present Situation:
Lack of industry orientation in research projects.

Recommendations:

  • Representatives from industry to be nominated to governing bodies of Central Industrial Research Organisations.

Agency: AIEI, DSIR, DST and Industries
Page No.: 60

Ref. 1.05
Present Situation:
CNC machine tools are so costly that few companies can afford such investment for replacing existing machines.

Recommendations:

  • Provision to import under OGL to actual users.
  • Auxiliary duty of 10% to be waived.
  • Customs duty reduction for components for CNC systems.

Agency: Ministry of Finance, Ministry of Industry, GOI
Page No.: 61

Ref. 1.06
Present Situation:
Quality considerations overridden in favour of production.
QA mainly oriented to inspection activities.

Recommendations:

  • Income-tax benefits to QC equipment similar to pollution control equipment.
  • Comprehensive & massive quality-related training programme.

Agency: NPC / AIEI, Industry Associations
Page No.: 62

Ref. 1.07
Present Situation:
Multiple external inspections create duplication of efforts and delays.

Recommendations:

  • Govt. projects to nominate only one agency for all quality requirements including statutory requirements.

Agency: Project Authorities concerned for GOI projects
Page No.: 63

Ref. 1.08
Present Situation:
Most organisations are not market oriented.

Recommendations:

  • Organisational responses to the market to be improved by emphasising market needs and redesigning organisational structures and operational policies/styles.

Agency: Industry
Page No.: 64

Ref. 1.09
Present Situation:
Inadequacy of after sales services.

Recommendations:

  • Supply contracts to cover maintenance and services.
  • Performance improvement to be carried out by manufacturers in consultation with users.

Agency: Industry
Page No.: 65

Ref. 1.10
Present Situation:
Acceptance of lowest price bids by Govt./Public sector organisations.

Recommendations:

  • Bid evaluation to be on total cost concepts.

Agency: Govt. & Public Sector Organisation
Page No.: 66

Ref. 1.11
Present Situation:
Income-tax is required to be deducted at source for payments exceeding Rs.10,000/- to contractors/sub-contractors.

Recommendations:

  • The limit to be raised to Rs.25,000/-.

Agency: Ministry of Finance – GOI
Page No.: 67

Ref. 1.12
Present Situation:
Technical know-how fees are allowed to be deducted over a period of six years while preliminary expenses are amortised over 10 years.

Recommendations:

  • Technical know-how fees be allowed to be deducted in the same year and preliminary expenses be allowed in the year in which taxable profits are available without time limit.

Agency: Ministry of Finance – GOI
Page No.: 68

Ref. 1.13
Present Situation:
Depreciation rates under I.T. Rules are too low.

Recommendations:

  • Higher depreciation rates to be provided.

Agency: Ministry of Finance, GOI
Page No.: 69

Ref. 1.14
Present Situation:
Undue delays in clearance affecting liquidity.

Recommendations:

  • Time limits to be specified for clearance/realisation of payments.

Agency: RBI and Commercial Banks
Page No.: 70

Ref. 1.15
Present Situation:
Local steel plates above 36 mm offered in unsheared condition.

Recommendations:

  • Plates to be in regular sizes with straight edges.

Agency: SAIL/TISCO; Ministry of Steel & Mines, GOI
Page No.: 71

Ref. 1.16
Present Situation:
Non-identification of individual plates by SAIL and TISCO resulting in rejection of unmarked plates by Third party inspection agency.

Recommendations:

  • Each plate to be marked.

Agency: SAIL/TISCO; Ministry of Steel & Mines, GOI
Page No.: 72

Ref. 1.17
Present Situation:
Poor and erratic delivery performance of SAIL.

Recommendations:

  • SAIL to be directed to give firm delivery in their offer letter.

Agency: SAIL & Ministry of Steel & Mines, GOI
Page No.: 73

Ref. 1.18
Present Situation:
Bonding period for imported goods limited to 3 months.

Recommendations:

  • To be extended to 12 months.

Agency: Central Board of Excise & Customs, Ministry of Finance, GOI
Page No.: 74

Ref. 1.19
Present Situation:
Last date for filing Supplementary Licence application is 15th December and that for receipt after endorsement by Sponsoring Authority is 31st January.

Recommendations:

  • Receipt be permitted beyond 31st January where recommendations from Sponsoring Authority are delayed beyond that date.

Agency: Import Policy Cell, DGTD; CCI & E (Ministry of Commerce), GOI
Page No.: 75

Ref. 1.20
Present Situation:
Customs officials give the ruling on duty leviable only after actual import.

Recommendations:

  • Customs Authorities to issue clarifications within 30 days of any enquiry.

Agency: Ministry of Finance, GOI Customs Houses
Page No.: 76

Ref. 1.21
Present Situation:
Excise duty on TIS 68 on intermediate goods allowed as set-off against finished goods.

Recommendations:

  • Intermediate goods to be allowed without payment of excise duty based on declaration.

Agency: Central Board of Excise & Customs, Dept. of Revenue, Ministry of Finance, GOI
Page No.: 77

Ref. 1.22
Present Situation:
Insufficient participation of workmen, staff and junior supervisors in decision making process.

Recommendations:

  • Organisations to form joint Labour Management committees at unit and shop levels.

Agency: Industry
Page No.: 78

Ref. 1.23
Present Situation:
Current syllabus for Workers’ Education scheme is too general and vague.

Recommendations:

  • Individual units to draw their own syllabus.

Agency: Industry, Central Board for workers’ Education
Page No.: 82

Ref. 1.24
Present Situation:
No proper control on late coming of staff.

Recommendations:

  • Uniform method of attendance marking using punch clocks from Chief Executive downwards.

Agency: Industry
Page No.: 83

Ref. 1.25
Present Situation:
Collective bargaining between Management and Union has resulted in greater faith & confidence.

Recommendations:

  • Amend Industrial Disputes Act 1947 to recognise major bargaining agent.

Agency: Ministry of Labour, GOI
Page No.: 84

Ref. 1.26
Present Situation:
No skill upgradation done to meet changing technology.

Recommendations:

  • Employers to provide in-house training facility for skill upgradation in employees.

Agency: Industrial Organisations
Page No.: 85

SHORT-TERM IMPLEMENTATION

2.01

Present Situation:
Considerable delay in obtaining clearance for know-how imports.

Recommendations:
Imports of know-how upto a value of Rs. 50 lakhs p.a. as one time payment must be put under OGL.

Agency: Ministry of Industry, Ministry of Finance, GOI
Page: 89

2.02

Present Situation:
Higher rates of custom duties for imports of capital equipment under TDF scheme vis-à-vis Project imports.

Recommendations:
Custom duties for all capital equipment to be limited to 45% as for Project imports.

Agency: Ministry of Industry, Ministry of Finance, GOI
Page: 90

2.03

Present Situation:
Overloading of some plants and underloading of others for multi-product, multi-location companies due to licensing of a product in a given location.

Recommendations:
Multi-product, multi-plant manufacturing company should be allowed to manufacture licensed products at any of its locations.

Agency: Ministry of Industry, GOI
Page: 91

2.04

Present Situation:
MRTP companies exempted from MRTP clearance only for a few specific items.

Recommendations:
MRTP companies to be exempted from seeking clearance for all items of Appendix I.

Agency: Ministry of Industry, GOI
Page: 92

2.05

Present Situation:
Tooling manufactured in-house and sent out on loan to vendors are subject to Excise.

Recommendations:
Same should be exempted from Excise duty.

Agency: Ministry of Finance, GOI
Page: 93

2.06

Present Situation:
Non-uniformity in implementation of Indian Boiler Regulations (IBR) among States.
Outdated requirements of IBR.

Recommendations:

  • IBR to be revised and its scope widened.
  • ISI code to cover design materials and manufacture
  • Periodic updating by a committee of ISI and the Industry

Agency: Industry Groups; Ministry of Industry (GOI), ISI
Page: 94

2.07

Present Situation:
Lack of clear and measurable technical specifications.

Recommendations:
Industrial Associations to formulate code of practice for eventual adoption by ISI.

Agency: Industry Associations
Page: 95

2.08

Present Situation:
Increasing maintenance requirements due to old and obsolete plant & machinery.

Recommendations:
Industries should be encouraged to replace obsolete machinery by granting financial incentives.

Agency: Ministry of Finance, GOI, CCI & E
Page: 96

2.09

Present Situation:
Maintenance of Computers is very expensive due to heavy customs duty on spares.

Recommendations:
Amend Customs Notification to include actual users for benefits of duty.

Agency: Dept. of Electronics / Ministry of Finance, GOI
Page: 97

2.10

Present Situation:
Role of Private sector in industrial growth restricted due to regulatory legislations.

Recommendations:

  • Raise licensing limit to Rs.10 crores
  • Define small scale upto Rs.100 lakhs
  • Enact new promotion oriented legislations

Agency: Ministry of Law & Industry, GOI; Industry Associations
Page: 98

2.11

Present Situation:
Several Questionnaires need to be submitted to different Govt. agencies.

Recommendations:
A comprehensive “Annual Technical Report” covering items of mfr. capacity utilisation, R&D efforts and other productivity statistics to be submitted to DGTD.

Agency: NPC, Industry Associations, DGTD
Page: 99

2.12

Present Situation:
Organised efforts to collect, assimilate and circulate productivity improvement ideas are lacking in the country.

Recommendations:
“Productivity Intelligence Centres” headed by a Technocrat to be set up in advanced countries.
Propagation through dailies & TV in regional languages.

Agency: NPC, Industry Associations
Page: 100

2.13

Present Situation:
Norms/indices for productivity evaluation not established in the country.

Recommendations:
Create data base on various productivity factors and make available to all manufacturing units.

Agency: NPC, Industry Associations
Page: 101

2.14

Present Situation:
Scarcity of new telephone lines.

Recommendations:

  • Satellite exchanges around the main exchange to be introduced
  • Separation of Telephone Dept. from P&T
  • Private participation

Agency: Ministry of Communications, GOI
Page: 102

2.15

Present Situation:
Uniform Electricity charges for Day & Night.

Recommendations:
Concessional rates for night consumption.

Agency: State Electricity Boards / Licensees
Page: 103

2.16

Present Situation:
Independent running of Captive generating sets resulting in under utilisation.

Recommendations:
Restriction regarding paralleling captive generation with grid supply to be removed.

Agency: State Electricity Boards / Licensees
Page: 104

2.17

Present Situation:
Cumbersome and time consuming procedures for Octroi clearance.

Recommendations:
Octroi to be substituted by another tax similar to Sales tax.

Agency: State Govt. and Municipal Corporations
Page: 105

2.18

Present Situation:
Gap in education in technical institutes vs Industry requirements.

Recommendations:
Industries to be involved in preparing curriculum, training etc. and also be represented on managing committees of institutes.

Agency: Ministry of Education, GOI; Universities, Tech. Directorate, Industry
Page: 106

2.19

Present Situation:
Equipment manufactured for own use are subjected to excise duty.

Recommendations:
Such machinery be exempted from excise.

Agency: Ministry of Finance, GOI
Page: 107

2.20

Present Situation:
Inefficient products based on obsolete technologies are in the market.

Recommendations:

  • Continuous assessment developments in technology by suppliers as well as users
  • Periodic in-company marketing audits covering technology, costs & benefits

Agency: Industry
Page: 108

2.21

Present Situation:
Best of collaborators and investors are not attracted to India.

Recommendations:
Streamlining procedures, reviewing taxation.

Agency: Govt. of India, Industry
Page: 109

2.22

Present Situation:
Restrictions on production due to licensed capacity limits.

Recommendations:
Industrial licences should specify only the product line and not capacity limits.

Agency: GOI
Page: 110

2.23

Present Situation:
Price/Purchase preferences for Public sector.

Recommendations:
Revoke the circular permitting such preferences.

Agency: GOI
Page: 111

2.24

Present Situation:
For a new undertaking established as a Division of an existing unit, common expenses are allocated on ad-hoc basis for computing profits.

Recommendations:
Tax exemption to be given as a percentage of value added, and deduction of 5% of value added be allowed.

Agency: Ministry of Finance, GOI
Page: 112

2.25

Present Situation:
Bank charges are based on value of transaction.

Recommendations:
Service charges should be Rs.25/- per DD/Mail transfer and Rs.50/- for telegraphic transfer for Companies.

Agency: RBI
Page: 113

2.26

Present Situation:
Avoidable administrative efforts for furnishing information in formats suggested by CHORE Committee.

Recommendations:
Latest audited annual accounts and data in CAS application to be used by the banks.

Agency: RBI
Page: 114

2.27

Present Situation:
Too many bank agencies involved in processing CAS applications.

Recommendations:
Applications to be cleared by zonal office and RBI within 60 days.

Agency: Reserve Bank of India
Page: 115

2.28

Present Situation:
Debt/Equity ratio and current ratio for other industries being used in evaluating credit limits of Industrial Machinery Manufacturers.

Recommendations:
The ratios to be relaxed for Industrial Machinery Sector.

Agency: Ministry of Finance, GOI
Page: 116

2.29

Present Situation:
Countervailing duty charged on components which are manufactured in India.

Recommendations:
The duty should be refunded if the items are used for manufacturing a product under the same tariff.

Agency: Ministry of Finance, GOI
Page: 117

2.30

Present Situation:
SAIL does not give timely relevant feedback on supplies.

Recommendations:
SAIL to issue Certificate on non-supply within 30 days of the end of the quarter, on demand, it should be valid for clearance of import applications.

Agency: SAIL / Iron & Steel Controller (Ministry of Steel & Mines) GOI
Page: 118

2.31

Present Situation:
Frequent and unpredictable price increase of Steel items, non-ferrous metals, Coal, etc.

Recommendations:
Price increase to be at set frequencies.

Agency: SAIL & MMTC, Ministry of Steel & Mines, Min. of Comm. GOI
Page: 119

2.32

Present Situation:
Import protection to indigenous products irrespective of value added.

Recommendations:
Remove such protection where indigenous value added is less than 33%.

Agency: DGTD; CCI & E
Page: 120

2.33

Present Situation:
Steel Forgings of all types have been specified by Import Policy Book as “Limited permissible items” although indigenous capacity limitation is 3 MT for Discs and 1.5 MT for Rings/Flanges.

Recommendations:
Description to be amended to exclude locally manufactured range.

Agency: Import policy Cell, DGTD; CCI & E
Page: 121

2.34

Present Situation:
Import of Stainless Steel plates less than 1.25 mtr wide canalised through MMTC. For width exceeding 1.25 mtr plates can be imported for thickness above 12 mm.

Recommendations:
Plates above 12 mm thick having width below 1.25 mtr also to be decanalised.

Agency: Import Policy Cell, DGTD; CCI & E
Page: 122

2.35

Present Situation:
Actual user has to apply for supplementary licences for materials covered by Appendix 3 regardless of value.

Recommendations:
Automatic supplementary licence equivalent to 1% of production or based on consumption be permitted.

Agency: Import Policy Cell, DGTD; CCI & E
Page: 123

2.36

Present Situation:
Difficulty in sale/transfer of imported material.

Recommendations:
Procedure in respect of Capital goods be made applicable with reduction of time for raw-materials/components to 5 years.

Agency: Import policy Cell, DGTD; CCI & E; Ministry of Commerce, GOI
Page: 124

2.37

Present Situation:
For orders received in the beginning of December it would not be possible to file Supplementary Licence application by 15th December.

Recommendations:
Last date to be extended to 31st March or specific provisions be made in such cases.

Agency: Import Policy Cell DGTD; CCI & E (Ministry of Commerce, GOI)
Page: 125

2.38

Present Situation:
Limited range of Boiler/Pressure Vessel quality of Plates/Coils are indigenously made, most of which are allocated to priority sectors. However, these items are classified as limited permissible.

Recommendations:
Steel plates covered by Sr.No.12, 22(b) and 23 of App.3 Part B be shifted to OGL.

Agency: Import Policy Cell, DGTD; CCI & E (Ministry of Commerce, GOI)
Page: 126

2.39

Present Situation:
DGTD units are required to go through a List Attestation Procedure for OGL items before import even though they are out of stipulated phased Manufacturing period.

Recommendations:
Units that have completed their phased Manufacturing Programme should not be asked to go through the Procedure.

Agency: Import Policy Cell, CCI & E (Ministry of Commerce, GOI)
Page: 127

2.40

Present Situation:
Import shipments to take place only after the date of issue of the relevant Import Licences.

Recommendations:
Customs to clear items shipped before date of licences but after date of submission of application.

Agency: Import-Export Policy Cell CCI&E Customs Dept. (Dept. of Revenue)
Page: 128

2.41

Present Situation:
Small Scale and Ancillary units cannot have expensive testing facilities individually.

Recommendations:
A Central body to set up such facilities in Industrial Estates.

Agency: ISI (Min. of Food & Civil Supplies) Dev. Commissioner Small Scale Inds; Min. of Ind. & Comp. Affairs, GOI
Page: 129

2.42

Present Situation:
Inadequacy and lack of expertise in resolving industrial disputes of special nature and non implementation of judgements of Courts/Tribunals.

Recommendations:
Appointment of Industrial Relations Commission at Central and State levels.

Agency: Ministry of Labour, Ministry of Law & Justice, GOI
Page: 130

2.43

Present Situation:
Employment exchanges at district levels unable to coordinate employment opportunities as envisaged.

Recommendations:
Modify the scheme to set-up District Level Employment boards with participation of Educational Institutions, University Bureau and Industry.

Agency: Ministry of Labour & GOI
Page: 131

2.44

Present Situation:
Benefit accruing out of the new Employees’ Stock Option scheme and reservation of right issues for employees are taxable.

Recommendations:
Same to be deductible under 80C.

Agency: Ministry of Co. affairs & Ministry of Finance, GOI
Page: 132

2.45

Present Situation:
Concern for productivity improvement is considered by trade unions as a responsibility of Management alone.

Recommendations:
Training of workmen and trade union office bearers to be given to make them conscious of their role in improving productivity.

Agency: Trade Union Organisations; Ministry of Labour, GOI
Page: 133

2.46

Present Situation:
Existing incentive schemes do not succeed in motivating employees.

Recommendations:
Appropriate production incentive schemes to be introduced.

Agency: NPC
Page: 134

PRODUCTIVITY BOARD FOR INDUSTRIAL MACHINERY

LONG-TERM IMPLEMENTATION

3.01

  • Present Situation: Widely varying inspection requirements of different inspection agencies.
  • Recommendation: Uniform quality control code to be evolved.
  • Agency: PBIM/NPC, Industry
  • Page No.: 137

3.02

  • Present Situation: Domestic effluents/wastes are not gainfully recycled.
  • Recommendation: Private industry to be encouraged to set up energy utilities and compost making plants.
  • Agency: Dept. of Environment, Dept. of Ind., Dept. of Energy, GOI, PBIM/NPC
  • Page No.: 139

3.03

  • Present Situation: IS specifications do not take care of present state of technology and developments.
  • Recommendation: IS to update specifications every five years.
  • Agency: Individual units, Industry Associations, ISI
  • Page No.: 140

3.04

  • Present Situation: Low level of general safety consciousness resulting in loss of production resources.
  • Recommendation: Factories Act & Rules to be upgraded to cover technological advancement.
  • Agency: National Safety Council/NPC, Govt. of India, State Govt.
  • Page No.: 141

3.05

  • Present Situation: CMC is the only authorised organisation for maintenance of imported computers.
  • Recommendation: Dept. of Electronics to establish alternative agencies to CMC.
  • Agency: Dept. of Electronics, GOI
  • Page No.: 142

3.06

  • Present Situation: Need for rationalisation and exemptions from MRTP clearances and licensing requirements.
  • Recommendation: Delicensing of priority industries exempted from MRTP.
  • Agency: Ministry of Industry, GOI
  • Page No.: 143

3.07

  • Present Situation: Entrepreneurs are urged to select “No industry districts” for new plant locations.
  • Recommendation: Encourage investment in underdeveloped “Talukas”, part of district, widespread in the country.
  • Agency: Ministry of Industry, GOI
  • Page No.: 144

3.08

  • Present Situation: Time-consuming procedures for approval of building plans by various departments.
  • Recommendation: Formation of a committee consisting of representatives of concerned departments to grant approval.
  • Agency: Central/State Govt & Municipality
  • Page No.: 145

3.09

  • Present Situation: Non-utilisation of land acquired under Urban Land Ceiling.
  • Recommendation: Unused land to be given for development of housing societies for industrial workers, vocational training centres/institutions etc.
  • Agency: Central & State Govt
  • Page No.: 147

3.10

  • Present Situation: Pre-conditions for granting Electronic Private Automatic Branch Exchange (EPABX).
  • Recommendation:
    • No pre-conditions to be specified.
    • Incentives for subscriber for operating EPABX.
  • Agency: Ministry of Communications, GOI
  • Page No.: 148

3.11

  • Present Situation: Lack of adequate data resulting in wastage of time for transport of over dimensional consignment (ODC).
  • Recommendation: Suitable directory giving all relevant data to be furnished.
  • Agency: Central Govt / State Govts
  • Page No.: 149

3.12

  • Present Situation: Limited availability of suitable wagons with Indian Railways for transporting ODC.
  • Recommendation: Indian Railways to develop adequate number of wagons with capacity of at least 300 tonnes.
  • Agency: Indian Railways
  • Page No.: 150

3.13

  • Present Situation: Quick parcel service not allowed in private sector.
  • Recommendation: To be allowed.
  • Agency: Ministry of Communication, GOI
  • Page No.: 151

3.14

  • Present Situation: Prohibitive land cost is deterrent for industry to sponsor technical/vocational training institute.
  • Recommendation: State Govts. to allot land at concessional rates for this purpose.
  • Agency: State Govts
  • Page No.: 152

3.15

  • Present Situation: Data on demographic, economic and demand parameters are inadequate, outdated and inaccessible.
  • Recommendation:
    • Establishment of a Central autonomous bureau for collecting and disseminating data.
    • Professional organisations to conduct specialised studies related to specific areas.
  • Agency: Govt. of India & Industry
  • Page No.: 153

3.16

  • Present Situation: Dumping by overseas suppliers.
  • Recommendation:
    • Decanalise purchase of certain items and place them under OGL
    • Expedite grant of import licences
    • Make available credit at competitive rates to local manufacturers
    • Reduce duty rates on raw materials and components such that they are not higher than those on imported finished goods
  • Agency: GOI
  • Page No.: 154

3.17

  • Present Situation: Deduction in respect of investment allowance is being allowed up to 31.03.1988.
  • Recommendation: To be continued beyond 31.03.1988.
  • Agency: Ministry of Finance, GOI
  • Page No.: 155

3.18

  • Present Situation: Restriction in availing various tax benefits to 70% of the taxable profits.
  • Recommendation: This limit to be removed.
  • Agency: Ministry of Finance, GOI
  • Page No.: 156

3.19

  • Present Situation: Non-availability of tax benefits is a disincentive for industries to promote technical institutes.
  • Recommendation: Capital & revenue expenditure for such institutes promoted by industries to be allowed tax reduction.
  • Agency: Ministry of Finance, GOI
  • Page No.: 157

3.20

  • Present Situation: Information relating to imports and production particulars in Annual Reports.
  • Recommendation: Same is being furnished to various Govt. agencies and can be dispensed with.
  • Agency: Ministry of Industry, Company Law Board
  • Page No.: 158

3.21

  • Present Situation: Rigorous excise procedure required for goods sent to secondary manufacturer.
  • Recommendation: Record keeping to be simplified.
  • Agency: Central Board of Excise & Customs, Dept. of Revenue, Ministry of Finance, GOI
  • Page No.: 159

3.22

  • Present Situation: Company not allowed to buy its own shares.
  • Recommendation: Company be allowed to fund such shares under Employees Stock Option Scheme.
  • Agency: Company Law Boards, Controller of Capital Issues
  • Page No.: 160

3.23

  • Present Situation: Disparities in wages in Industrial Machinery sector.
  • Recommendation: Constitute a wage board for bringing uniformity in wages, DA etc.
  • Agency: NPC / Local Productivity Councils, GOI, AIEI
  • Page No.: 161

3.24

  • Present Situation: Non-exposure to personnel management practices for officials in Govt. Labour Departments.
  • Recommendation: Formation of a cadre of Indian Human Resource Development Service (IHRDS).
  • Agency: Ministry of Labour, GOI
  • Page No.: 162

RECOMMENDATIONS FOR IMMEDIATE IMPLEMENTATION

(Title Page – No additional content)

 

scan0066.jpg

LOW COST AUTOMATION (Ref: No. 1.01)

PRESENT SITUATION :
Low cost automation in industry is a cost effective approach for improving productivity. It entails a low level of automation involving pneumatic circuits, small tools, pneumatic screw drivers, high frequency screw drivers, auto-feed devices for machine tools, etc. There is a need for increasing the industry-level and Government-level thrusts in this direction.

CHANGE/ACTION DESIRED :

  1. Some of the selected National Centres like NPC and Central Tool Rooms should develop programmes and Consultancy Services in the area of Low Cost Automation, primarily aimed at small and medium scale industries.
  2. There is a need to promote the manufacture of such low cost automation devices within the country in a massive way. GOI and Industries should plan imaginative programmes on this subject for broadcast on the TV network.
  3. The Government should announce a package of measures to promote manufacture of such productivity boosting devices within the country and in the interim period liberalise imports of the same.

ACTION BY :
Ministry of Industry, NPC & Industries

ADVANTAGES EXPECTED :
Higher productivity through Low Cost Automation.

PROPOSAL :

  • is related to : Technology
  • in respect of : Availability, Awareness and Motivation

PRODUCTIVITY BOARD FOR INDUSTRIAL MACHINERY
(Page 57)

R&D THRUST (Ref: No. 1.02)

PRESENT SITUATION :
Today, the Dept. of Science & Industrial Research (DSIR) gives recognition to Inhouse R&D set-ups and such units get the following benefits:-

  1. OGL import of equipment, raw materials, samples, instruments, etc. for the purpose of R&D.
  2. 100% Tax deduction on capital cash flow incurred for R&D purposes.

Despite this, there is a lack of desired thrust towards Inhouse R&D efforts from the industries as a whole, as brought out in the Taskforce survey. In some of the workshops of PBIM, recommendations have been made to levy an R&D cess from the industries with a view to promoting In-house R&D.

CHANGE/ACTION DESIRED :

  1. R&D recognition to be given to manufacturing units only if the preceding 3 years' average expenditure on R&D (capital + revenue) is equal to/or in excess of 2% of the annual sales turnover.
  2. Manufacturing houses having a recognised In-house R&D setup should be given benefits as under:
    (a) R&D capital expenditure should be allowed 100% tax deduction as it exists today.
    (b) If R&D expenditure (revenue) exceeds 2% of the sales turnover, for a fiscal year, the quantum in excess of 2% should be allowed a weighted tax deduction at 135%.
    (c) All DGTD registered units having a sales turnover exceeding Rs. 50 crores, should be subject to an R&D cess as per the following policy:

If a manufacturing unit spends less than 2% of the sales turnover on R&D, that quantum by which it falls short of 2% should be treated as income and taxed.

Section 35.1 and 35.2 of Income-tax Act to be amended.

ACTION BY :
DSIR and Ministry of Finance, GOI

ADVANTAGES EXPECTED :
Studies have revealed that increased expenditure on R&D always results in increase in overall productivity of the manufacturing sector in the long run. With the above policy there will be increased spending in R&D (both process and product related) with consequent improvement in the overall productivity of the industry.

PROPOSAL :

  • is related to : Technology
  • in respect of : Govt. policy, Company policy, Expenses

PRODUCTIVITY BOARD FOR INDUSTRIAL MACHINERY
(Page 58)

R&D INCENTIVE (Ref: No. 1.03)

PRESENT SITUATION :
Section 35(2A) and 35(2B) of the Income-tax Act used to permit weighted tax deduction (135%) of the expenditure incurred on sponsored research conducted through approved Scientific Research Bodies with prior approval of DSIR. However, this has been withdrawn in the current Finance Act.

CHANGE/ACTION DESIRED :
The policy of weighted tax deduction on expenditure incurred in connection with sponsored research in approved Scientific Research Institutions should continue.

Section 35(2A) and 35(2B) of the Income tax Act to be amended suitably.

ACTION BY :
DSIR and Ministry of Finance, GOI

ADVANTAGES EXPECTED :

  1. A fillip and boost to R&D efforts in industry and better utilisation of the potential in many of the centrally established research institutions.
  2. Involvement of Govt. Research Institutions in tackling problems connected with industries.

PROPOSAL :

  • is related to : Technology
  • in respect of : Govt. Policy & Expenses

PRODUCTIVITY BOARD FOR INDUSTRIAL MACHINERY
(Page 59)

INDUSTRY ORIENTATION – R&D (Ref: No. 1.04)

PRESENT SITUATION:

Despite the formation of several advanced technology research centres under the Government, e.g. NPL, NCL, CLRI, etc., it is noticed that there is a lack of industry orientation in many of the research projects undertaken by these bodies. It is the general impression that most of the research is towards publication of "papers". Though some part of the research may be fundamental in nature, with no immediate industry application, at least some part of the research has to have industry application orientation. There is also a need to co-ordinate "application" more effectively.

CHANGE/ACTION DESIRED:

In order to give an application/industry orientation for R&D Projects, it is suggested that representatives from industry are nominated to the governing bodies of central industrial research organisations and that these bodies be made autonomous.

ACTION BY:

AIEI, DSIR/DST and Industries

ADVANTAGES EXPECTED:

Better industry orientation of research projects undertaken by DSIR laboratories and possible better patronage of ongoing research in these bodies by industries.

PROPOSAL:

  • is related to: Technology
  • in respect of: Govt. policy & Awareness

CNC RETROFITS (Ref: No. 1.05)

PRESENT SITUATION:

The use of CNC systems can have a dramatic impact on productivity in machining operations. The prices of CNC machine tools, however, are prohibitive and only a few companies can afford such investment as replacement of existing machines.

CHANGE/ACTION DESIRED:

  1. Government has allowed import of CNC systems under OGL only for machine tool industries. To encourage retrofitting, this provision should apply to all.
  2. Customs tariff on CNC systems totals 35%. CNC systems should be exempted from Auxiliary Duty.
  3. Duty on servomotors and drive components is 185%. It should be reduced to align with CNC systems.

Retrofitting avoids heavy investment in new machines.

ACTION BY:

Ministry of Industry & Ministry of Finance, GOI

ADVANTAGES EXPECTED:

Encourages Indian manufacturers to modernise existing machine tools with minimal investment.

PROPOSAL:

  • is related to: Technology
  • in respect of: Govt. policy/procedure

TOTAL QUALITY CONTROL (Ref: No. 1.06)

PRESENT SITUATION:

  1. Strong profit motivation leads to ignoring quality, affecting long-term growth.
  2. Quality assurance is inspection-focused rather than organisation-wide.

CHANGE/ACTION DESIRED:

  • Shift from product quality to quality of work processes.
  • Comprehensive training programs across levels.
  • Strong top management support.

ACTION BY:

NPC/AIEI, Industry Associations

ADVANTAGES EXPECTED:

  1. Improved product quality and marketability.
  2. Reduced rework and delays.

PROPOSAL:

  • is related to: Quality Control
  • in respect of: Awareness/Motivation

INSPECTION: EXTERNAL AGENCIES (Ref: No. 1.07)

PRESENT SITUATION:

Multiple inspection agencies cause:

  1. Duplication of efforts
  2. Conflicting interpretations
  3. Delays and resource loss

CHANGE/ACTION DESIRED:

For Government projects, only one agency should handle all quality requirements including statutory needs.

ACTION BY:

Project authorities for GOI projects

ADVANTAGES EXPECTED:

  • Reduced delays
  • Elimination of duplication

PROPOSAL:

  • is related to: Quality Control
  • in respect of: Govt. policy/procedures

MARKET ORIENTATION (Ref: No. 1.08)

PRESENT SITUATION:

Organisational responses to market needs need improvement.

CHANGE/ACTION DESIRED:

  1. Define corporate missions based on market needs
  2. Align structures and policies with market demand

ACTION BY:

Industry

ADVANTAGES EXPECTED:

  1. Better resource utilisation
  2. Improved customer satisfaction
  3. Faster alignment with demand

PROPOSAL:

  • is related to: Marketing
  • in respect of: Company Policy

AFTER SALES SERVICE (Ref: No. 1.09)

PRESENT SITUATION:

After-sales services are limited mainly to warranty services.

CHANGE/ACTION DESIRED:

  1. Offer maintenance/service contracts
  2. Improve performance through manufacturer-user collaboration

ACTION BY:

Industry

ADVANTAGES EXPECTED:

  1. Improved performance
  2. Flexible investment use

PROPOSAL:

  • is related to: Marketing
  • in respect of: Company Policy

BID EVALUATION (Ref: No. 1.10)

PRESENT SITUATION:

Lowest-price bidding disadvantages high-quality providers.

CHANGE/ACTION DESIRED:

  1. Evaluate bids on total cost
  2. Modify vendor rating systems

ACTION BY:

Government and Public Sector Organisations

ADVANTAGES EXPECTED:

  1. Promotion of quality
  2. Better investment optimisation

PROPOSAL:

  • is related to: Marketing
  • in respect of: Government Policy

T.D.S. – CONTRACTORS (Ref: No. 1.11)

PRESENT SITUATION:

Under Section 194C, tax is deducted at source for contracts exceeding ₹10,000, causing heavy administrative work.

CHANGE/ACTION DESIRED:

Raise limit to ₹25,000 by amending Section 194C.

ACTION BY:

Ministry of Finance – Govt. of India

ADVANTAGES EXPECTED:

Reduced administrative work

PROPOSAL:

  • is related to: Direct taxes
  • in respect of: Govt. policies/procedures

AMORTISATION OF KNOWHOW FEES & PRELIMINARY EXPENSES (Ref: No. 1.12)

PRESENT SITUATION:

  • Knowhow fees amortised over 6 years (Section 35AB)
  • Preliminary expenses over 10 years (Section 35D)
  • Periods are too long

CHANGE/ACTION DESIRED:

  • Allow deduction in year of payment
  • Remove time limits for preliminary expenses

ACTION BY:

Ministry of Finance – Govt. of India

ADVANTAGES EXPECTED:

  1. Improved liquidity
  2. Reduced administrative burden

PROPOSAL:

  • is related to: Direct taxes
  • in respect of: Govt. policies/procedures

CLEARANCE OF CHEQUES & DOCUMENTS (Ref No. 1.14)

PRESENT SITUATION:

Money gets blocked with banks due to:

  1. Undue delays in clearance of cheques and transfer of funds
  2. Undue delays in realization of receipts against documents
  3. Delays in intimation of non-acceptance by customers

CHANGE/ACTION DESIRED:

Time limits be specified for:

  1. Clearance of cheques and transfer of funds
  2. Realization of payments

RBI to specify the following time limits:

  • a) Realization of up-country cheques – one week
  • b) Realization of local cheques – next working day
  • c) Transfer of funds – next working day
  • d) Transfer of proceeds against documents – three days
  • e) Intimation in case of dishonour – three days

ACTION BY:

Reserve Bank of India and Commercial Banks

ADVANTAGES EXPECTED:

  1. Better utilisation of funds
  2. Reduced interest charges
  3. Early realization of outstandings
  4. Recall of materials in transit and documents in case of dishonour

PROPOSAL:

  • Related to: Finance
  • In respect of: Govt. policies/procedures

SHEARED PLATES (Ref No. 1.15)

PRESENT SITUATION:

Indian Steel Mills offer steel plates of thickness above 36mm in unsheared condition without rectangular size. This results in considerable wastage during manufacture.

CHANGE/ACTION DESIRED:

SAIL/TISCO must supply plates in rectangular sizes with straight edges only.

ACTION BY:

  • SAIL/TISCO
  • Ministry of Steel & Mines, GOI

ADVANTAGES EXPECTED:

Reduction in material wastage.

PROPOSAL:

  • Related to: Materials
  • In respect of: Availability, Expenses

PLATE MARKINGS (Ref No. 1.16)

PRESENT SITUATION:

Steel plates used in industrial machinery are subjected to inspection by third-party agencies insisting on original mill markings.

Foreign mills mark each plate individually, whereas SAIL/TISCO mark only the top plate of a stack (up to 40 plates), without manufacturer’s symbol.

Unmarked plates are rejected, requiring repeated testing.

CHANGE/ACTION DESIRED:

SAIL/TISCO must install machinery to automatically mark each plate with:

  • Manufacturer’s symbol
  • Specification
  • Heat number
  • Size

ACTION BY:

  • SAIL and TISCO
  • Ministry of Steel & Mines, GOI

ADVANTAGES EXPECTED:

Material acceptance becomes more authentic.

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policy/procedure

SAIL DELIVERY PROMISE (Ref No. 1.17)

PRESENT SITUATION:

SAIL offer letters include clause:
“Time is not the essence of the contract…”

This leads to:

  • Uncertain deliveries
  • Higher inventory
  • Difficulty in production planning

CHANGE/ACTION DESIRED:

SAIL should specify firm delivery schedules in offer letters.

ACTION BY:

  • SAIL
  • Ministry of Steel & Mines, GOI

ADVANTAGES EXPECTED:

  1. Reduction in inventory
  2. Better production planning
  3. More realistic delivery commitments

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policy/procedure

CUSTOMS BONDING PERIOD (Ref No. 1.18)

PRESENT SITUATION:

Warehousing period reduced from 3 years to 3 months under Customs Act 1962, affecting viability of bonded warehouses.

CHANGE/ACTION DESIRED:

  • Bonding period should be at least 12 months
  • Replace “3 months” with “12 months” in Section 61

ACTION BY:

Central Board of Excise & Customs, Ministry of Finance

ADVANTAGES EXPECTED:

  1. Economically viable bonded warehouses
  2. Uninterrupted supply of materials
  3. Reduced cost and improved productivity

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policy/procedure

RECOMMENDATIONS: SUPPLEMENTARY LICENCES (Ref No. 1.19)

PRESENT SITUATION:

  • Application deadline: 15th December
  • Recommendation deadline: 31st January

Delays cause:

  • Applications not reaching licensing authority in time
  • Import licences being denied

CHANGE/ACTION DESIRED:

CCI&E to instruct Regional Licensing Authorities to apply Para 37 of Import Policy when delays occur.

ACTION BY:

Import Policy Cell, DGTD
CCI&E (Ministry of Commerce)

ADVANTAGES EXPECTED:

  1. Timely availability of imported inputs
  2. Reduction in paperwork and delays

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policy/procedure

CUSTOMS CLARIFICATION (Ref No. 1.20)

PRESENT SITUATION:

Customs clarifications take 3–12 months, causing:

  • Demurrage
  • Loss/theft risks
  • Legal disputes

Advance clarification is difficult.

CHANGE/ACTION DESIRED:

Customs must issue clarifications within 30 days and keep them valid unless policy changes.

ACTION BY:

Ministry of Finance; Customs Houses

ADVANTAGES EXPECTED:

  1. Faster clearance
  2. Better duty planning

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policy/procedure

EXCISE SET-OFF (Ref No. 1.21)

PRESENT SITUATION:

Excise duty set-off involves heavy paperwork and delays, affecting production.

CHANGE/ACTION DESIRED:

  • Exempt intermediate goods used in further production
  • Allow clearance without duty based on declaration

ACTION BY:

Central Board of Excise & Customs
Ministry of Finance

ADVANTAGES EXPECTED:

  • Better utilisation of excise staff
  • More working capital for small sector
  • No loss to exchequer
  • Simplified record keeping

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policies/procedure

EMPLOYEE PARTICIPATION (Ref No. 1.22)

PRESENT SITUATION:

Worker participation proposed earlier but not implemented effectively due to lack of structured schemes.

CHANGE/ACTION DESIRED:

  • Develop positive attitudes
  • Implement structured participation schemes at all levels

Annexures:

  • A: Three-tier model for productivity improvement
  • B: Pyramid of participative effort (4-phase scheme)

ACTION BY:

All Industrial Organisations

ADVANTAGES EXPECTED:

  1. Greater employee commitment
  2. Improved productivity
  3. Better idea generation
  4. Incentive schemes linked to productivity

PROPOSAL:

  • Related to: Human resources
  • In respect of: Company policies

ANNEXURE – A

3 – TIER PRODUCTIVITY IMPROVEMENT – WORKER PARTICIPATION MODEL

LEVELS

NAME

CONSTITUTED BY

FREQUENCY OF MEETING

1

Plant Committee

- General Manager / Production Managers
- Union Committee Members
- Invitees

Quarterly

2

Unit Committee

- Production Managers, Superintendents, Materials Managers, Quality Control Managers
- Concerned Union Committee Member
- Shop Representatives

Monthly

3

Shop Committee

- Superintendent / Foreman
- Management Support Staff (Workstudy / SQC / Production Control / Material Control)
- Shop Representatives

Weekly

Footer:
Productivity Board for Industrial Machinery (Page 79)

FUNCTION / ROLE OF PLANT COMMITTEE (LEVEL 1)

i) To lay down details of approach/strategy to be followed in achieving productivity goals on an overall basis for the next three years.

ii) To review frequently the achievements and advise further action as required.

iii) To discuss and resolve matters emanating from unit committees which remain unresolved.

iv) To provide direction in the matter of:
    a) enhancing productivity awareness at all levels
    b) conducting productivity skills/attitude development training programmes

v) To take such policy decisions as felt necessary from time to time in making the productivity improvement programme a success.

FUNCTION / ROLE OF THE UNIT COMMITTEE (LEVEL 2)

i) To lay down Annual / Quarterly / Monthly productivity and production targets for the Unit.

ii) To prepare time-bound action plans for improving production, productivity and efficiency including elimination of wastage, optimum utilisation of machine capacity and manpower.

iii) To arrange to prepare minutes of such meetings and circulate the decisions/deliberations to Plant Committee and Shop Committees.

FUNCTION / ROLE OF SHOP COMMITTEE (LEVEL 3)

i) Based on the monthly targets fixed by the Unit Committee, to develop action plans for achieving weekly/daily production/productivity targets.

ii) To develop and follow productivity norms of man and machine for various operations in the Shop.

Footer:
Productivity Board for Industrial Machinery (Page 80)

ANNEXURE – B

PYRAMID OF PARTICIPATIVE EFFORT

Top Level

  • Employer Employee TRUSTEESHIP

Upper Middle Level

  • INFORMATION SHARING

Decision Level

  • INPUT DECISIONS
  • OUTPUT DECISIONS

Programme Level

  • FAMILY WELFARE PROGRAMME
  • DISCIPLINE & WORK ETHICS

Committee Level

  • PRODUCTIVITY COMMITTEE
  • HEALTH CARE PROGRAMME
  • JOINT I.R. SEMINARS

Support Systems

  • P.F. TRUST
  • CREDIT SOCIETY
  • HOUSE JOURNAL

Grassroot Participation

  • WORKS COMMITTEE
  • SPORTS CLUB
  • CANTEEN COMMITTEE
  • SUGGESTION SCHEME

Foundation of Worker’s Participation

  • UNION OFFICE BEARERS’ ADVANCE TRAINING
  • SHOP – REP’s TRAINING SCHEMES
  • WORKMEN’S EDUCATION

Side Note:
“Foundation of Worker’s Participation”

Footer:
Page 81

WORKERS EDUCATION – SYLLABUS
Ref. No. 1.23

PRESENT SITUATION:

Workers' education is assuming increasing importance. Education of workers engaged in operation of modern plant and machinery needs special attention. The present scheme of workers' education operated by the Central Board of Workers' education is not adequate and has failed to meet the requirements of the changing industrial environment.

As pointed out by the National Commission on Labour, proper opportunities should be provided for the Trade Unions to organise workers' education. The syllabus for workers' education should be modified to cover topics such as trade unionism, industrial relations, labour laws, National economy etc.

CHANGE / ACTION DESIRED:

Trade Unions at the plant level should be invited to organise programmes for workers' education on the basis of approved syllabus.

The Management to extend all possible co-operation in this effort.

A model syllabus is given in Annexure V for reference.

ACTION BY:

Central Board for Workers' Education; Individual Industrial Units.

ADVANTAGES EXPECTED:

  • It will increase employee awareness about the Unit/Industry.
  • Due to information-sharing and interaction with the Management staff, commitment to the organisation will increase.

PROPOSAL:

  • is related to: Human resources
  • in respect of: Awareness

DISCIPLINE AND PUNCTUALITY
Ref. No. 1.24

PRESENT SITUATION:

  • Absenteeism level in all Indian Industries is high.
  • Workmen not conscious of discipline and punctuality.

CHANGE / ACTION DESIRED:

i) To introduce modern equipment for marking attendance of employees including senior executives of the company

ii) To exercise control on misuse of leave benefits by employees

iii) Introduction of attendance reward scheme

ACTION BY:

Industrial Organisations

ADVANTAGES EXPECTED:

  1. Improvement in punctuality
  2. Control on absenteeism, thereby ensuring higher output and disciplined working class

PROPOSAL:

  • is related to: Human Resources
  • in respect of: Company Policy

COLLECTIVE BARGAINING
Ref. No. 1.25

PRESENT SITUATION:

Peaceful collective bargaining as an effective method for achieving negotiated settlements between Management and the Union has resulted in a relationship of greater faith and confidence. This provides an atmosphere conducive to productivity improvement.

CHANGE / ACTION DESIRED:

Government of India to amend the Industrial Disputes Act 1949:

a) To include provisions for recognition of the major bargaining agent

b) To clearly lay down the rights and limitations of a minority union in the collective bargaining process

ACTION BY:

Ministry of Labour, Govt. of India

ADVANTAGES EXPECTED:

  1. Encouragement to collective bargaining process, thereby increasing employees’ faith in organised trade union movement
  2. Avoidance of delays and frustrations by clear definitions of the roles of majority and minority unions

PROPOSAL:

  • is related to: Human Resources
  • in respect of: Govt. policy/procedure

SKILL UPGRADATION TO MEET CHANGING TECHNOLOGY
Ref. No. 1.26

PRESENT SITUATION:

With the current tide of bringing in new technologies to the country, there is a need to upgrade the existing skills of the employees. Planned efforts are required to be undertaken by the employers to ensure this upgradation of skills.

CHANGE / ACTION DESIRED:

Employers should provide in-house training facilities to upgrade the existing technical skills of the employees.

ACTION BY:

Industrial Organisations

ADVANTAGES EXPECTED:

  1. Employees will be able to meet the skill requirement of changing technology
  2. Employees' skills will not become obsolete

PROPOSAL:

  • is related to: Human Resources
  • in respect of: Company Policy

RECOMMENDATIONS
FOR
‘SHORT-TERM’ IMPLEMENTATION

KNOW-HOW ACQUISITION (Ref. No. 2.01)

SHORT TERM

PRESENT SITUATION:

Despite the Government's liberalisation of import of know-how through collaboration, there is considerable delay, by way of obtaining clearances through Governmental Agencies like Foreign Investment Board, Projects Approval Board, etc., even in cases where many know-how imports involve only a one-time payment.

CHANGE/ACTION DESIRED:

Import of know-how (drawings, designs, specifications, process-sheets, software, etc.) upto a value of Rs. 50 lakhs per annum per undertaking as one-time payment must be put under OGL.

ACTION BY:

Ministry of Industry / Ministry of Finance, GOI

ADVANTAGES EXPECTED:

a) Reducing delays in acquiring technology.
b) Faster adaptation of technology.

PROPOSAL:

  • is related to : Technology
  • in respect of : Govt. policy; Availability

PRODUCTIVITY BOARD FOR INDUSTRIAL MACHINERY

MODERNISATION - TDF (Ref. No. 2.02)

SHORT TERM

PRESENT SITUATION:

Import of capital equipment under the TDF scheme for modernisation attracts customs duties ranging from 65% to 180% whereas the same category of capital goods under Project Imports attracts much lesser customs duties. This in turn increases the input costs of modernisation, thereby lowering the overall productivity.

CHANGE/ACTION DESIRED:

Limit the customs duty on all imports of capital equipment against TDF to 45% as in the case of Project Imports.

ACTION BY:

Ministry of Finance & Ministry of Industry, GOI.

ADVANTAGES EXPECTED:

Boost to modernisation scheme since input costs will be lowered.

PROPOSAL:

  • is related to : Plant & Machinery
  • in respect of : Government policy

PRODUCTIVITY BOARD FOR INDUSTRIAL MACHINERY

LOCATIONAL FLEXIBILITY (Ref. No. 2.03)

SHORT TERM

PRESENT SITUATION:

Due to fluctuations in market demand, in most multi-product/multi-location companies, a situation arises wherein some of the plants are overloaded while other plants are starved of orders. However, the present industrial licensing which grants licence to manufacture a product in a given location, prohibits the same being manufactured at another location, though facilities needed may be common. This results in gross under-utilisation of capacity. Broad-banding of products under industrial licence may partly solve the problem but not fully.

CHANGE/ACTION DESIRED:

A multi-product/multi-plant manufacturing company should be allowed to produce its licensed products in any of its plant locations as indicated in the industrial licence.

ACTION BY:

Ministry of Industry, GOI

ADVANTAGES EXPECTED:

Better utilisation of installed capacity.

PROPOSAL:

  • is related to : Plant & Machinery
  • in respect of : Government policy/procedure

PRODUCTIVITY BOARD FOR INDUSTRIAL MACHINERY

MRTP EXEMPTION (Ref. No. 2.04)

SHORT TERM

PRESENT SITUATION:

At present, MRTP companies are exempted from MRTP clearances only for a few specific items of Industrial Machinery Sector such as Pollution Control Equipment, Process Equipment for utilisation of recycling of wastes, Dairy equipment like Homogenisers, etc.

CHANGE/ACTION DESIRED:

MRTP companies should be exempted from seeking MRTP clearance for manufacture of ALL items of Industrial Machinery appearing in Appendix I, or better still, MRTP commission should look into only restrictive trade practices.

ACTION BY:

Ministry of Industry, GOI.

ADVANTAGES EXPECTED:

Rapid advancement abroad in products and manufacturing processes can be quickly acquired and assimilated by Indian industries with consequent benefits of productivity, cost, quality, etc.

PROPOSAL:

  • is related to : Marketing
  • in respect of : Govt. policy/procedures

PRODUCTIVITY BOARD FOR INDUSTRIAL MACHINERY

ANCILLARISATION THRUST (Ref. No. 2.05)

SHORT TERM

PRESENT SITUATION:

At present, tooling (Press tools, Die casting dies, special jigs & fixtures, etc.) manufactured in-house are subjected to excise duty ranging from 12% to 15% when they are sent out to vendors even if on loan. This is a retrograde step as far as vendor development and promotion of ancillaries are concerned. The logic of loaning tools to vendors/ancillaries is to help them in a technological sense. In addition, the procedure involves considerable amount of paper work and record keeping.

CHANGE/ACTION DESIRED:

The excise duty leviable on tools (press tools, moulding dies, die casting dies, special jigs & fixtures, etc.) manufactured in-house and loaned to vendors be exempted from excise duty.

Rule 51A and 68 of Central Excise Rules to be amended.

ACTION BY:

Ministry of Finance, GOI

ADVANTAGES EXPECTED:

  1. Boost to ancillarisation.
  2. Reduction of paper work.

PROPOSAL:

  • is related to : Materials
  • in respect of : Govt. policy/procedure

PRODUCTIVITY BOARD FOR INDUSTRIAL MACHINERY

STANDARDIZATION (Ref. No. 2.06)

SHORT TERM

PRESENT SITUATION:

Manufacture of components covered by Indian Boiler Regulations (IBR) faces a number of hurdles due to:

a) Outdated requirements of IBR.
b) Non-uniformity in implementation of IBR, between States.

CHANGE/ACTION DESIRED:

  1. Short term:
    IBR should be revised to permit established international specifications, viz. ASME, BS, AD-MERKBLATTER, DIN and JIS for boilers.
    Sub-regulation (6) of Regulation 3 of IBR 1950 should be amended suitably.
  2. Long term:
    The Indian Boiler Regulation (1950) covers design, material, manufacture, installation, operation, maintenance and safety aspects of steam boilers in India.
    To enhance standardization and operational efficiency, it is recommended that:
    • Operation, maintenance and safety remain under IBR
    • Design, material and manufacture be covered under appropriate ISI codes aligned with international norms
  3. A committee comprising Boiler Board, ISI and Industry should be formed (on ASME lines) for periodic updating of standards and operations.

ACTION BY:

ISI; Industry Groups; Ministry of Industry, GOI

ADVANTAGES EXPECTED:

Standardization, reduced manufacturing cycle time, increased productivity.

PROPOSAL:

  • Related to: Materials
  • In respect of: Awareness

INSPECTION REQUIREMENTS (Ref. No. 2.07)

SHORT TERM

PRESENT SITUATION:

Customers usually involve third-party inspection at manufacturers’ works to ensure product quality.

Lack of clear and measurable technical specifications and workmanship leads to:

  • Disagreements and disputes during manufacturing
  • Delays and unproductive efforts

CHANGE/ACTION DESIRED:

Industry Associations should collaborate with:

  • Users
  • Consultancy organizations
  • Inspection agencies

To formulate standardized “Code of Practice / Specifications.”

ACTION BY:

Industry Associations

ADVANTAGES EXPECTED:

  • Smooth execution of orders
  • Elimination of unnecessary hold points
  • Reduced cycle time
  • Elimination of unproductive efforts

PROPOSAL:

  • Related to: Quality Control
  • In respect of: Awareness

REPLACEMENT – OBSOLETE EQUIPMENT (Ref. No. 2.08)

SHORT TERM

PRESENT SITUATION:

Maintenance requirements are increasing because manufacturers continue using old and low-productivity machinery due to:

a) Reluctance to discard old machinery (capital cost considerations; written-down assets aid profitability)

b) Government incentives favor new projects more than replacement in existing units

CHANGE/ACTION DESIRED:

  • Encourage replacement of old machinery with modern technology
  • Extend customs duty benefits and incentives applicable to new projects to replacement of plant and machinery

ACTION BY:

Ministry of Finance; CCI & E

ADVANTAGES EXPECTED:

  1. Lower maintenance costs
  2. Improved availability and utilization of modern machinery

PROPOSAL:

  • Related to: Plant & Machinery
  • In respect of: Govt. policy/procedure

COMPUTERS – DUTY ON SPARES (Ref. No. 2.09)

SHORT TERM

PRESENT SITUATION:

  • High maintenance cost due to 280.8% customs duty on imported computer spares
  • Notifications 208/85-Cust. & 209/85-Cust. (July 1985) allow Computer Maintenance Corp. (CMC) to import non-electronic parts at 5% duty
  • This benefit is not available to actual users

CHANGE/ACTION DESIRED:

Amend notifications 208/85-CUST & 209/85-CUST to include:

  1. Electronic parts and sub-assemblies
  2. Actual users, computer manufacturers and other designated agencies (not just CMC)

ACTION BY:

Department of Electronics / Ministry of Finance, GOI

ADVANTAGES EXPECTED:

  1. Improved utilization of computers
  2. Reduced maintenance cost

PROPOSAL:

  • Related to: Computers
  • In respect of: Govt. policy/procedures

LEGISLATIONS – INDUSTRIAL DEVELOPMENT (Ref. No. 2.10)

SHORT TERM

PRESENT SITUATION:

Industrial development is restricted due to overly regulatory legislation.

CHANGE/ACTION DESIRED:

Complete overhaul of legislation to shift from control-oriented to promotion-oriented framework:

  1. Raise industrial licensing limit to Rs. 10 crores
    • Define small scale as investment up to Rs. 100 lakhs
  2. Draft/enact simplified legislation replacing existing Acts
    • Industry Associations and Chambers of Commerce to play active roles

ACTION BY:

Ministry of Law & Industry, Govt. of India; Industry Associations

ADVANTAGES EXPECTED:

  • Accelerated industrial growth
  • Economic progress
  • Increased employment
  • Faster technological advancement
  • Improved standard of living

PROPOSAL:

  • Related to: Industrial Licensing
  • In respect of: Govt. policy/procedures

SHORT TERM – INFORMATION-PRODUCTIVITY IMPROVEMENTS (Ref. No. 2.12)

PRESENT SITUATION:
Organised efforts to collect, assimilate and circulate productivity improvement ideas are lacking in the country.

CHANGE/ACTION DESIRED:
Information on new productivity ideas should be made available to all Industrial Machinery manufacturers.

  1. "Productivity Intelligence Centres" should be set up in advanced countries (eg. USA, Japan) headed by a (non-resident) technocrat in the initial period.
  2. Productivity ideas to be propagated through periodicals, TV and other mass media preferably in regional languages.
  3. The role of National Productivity Council (NPC) should be thoroughly reviewed and its charter redefined to effectively accomplish this task.

ACTION BY:
NPC, Industry Associations

ADVANTAGES EXPECTED:
Tapping of ideas from various sources will give impetus to productivity.

PROPOSAL:

  • Related to: Information
  • In respect of: Awareness

SHORT TERM – PRODUCTIVITY MONITORING NORMS (Ref. No. 2.13)

PRESENT SITUATION:

  1. Lack of awareness among industrial machinery manufacturers that productivity needs improvement through conscious efforts.
  2. No industry-wise database available for periodic productivity analysis.
  3. No established norms/indices for evaluating productivity.

CHANGE/ACTION DESIRED:
NPC, in consultation with Industry Associations should:

  1. Establish productivity performance indices such as:
    a. Market standing
    b. Resource utilisation
    c. Profitability
    d. Financial effectiveness
    e. Social responsibility
  2. Establish system for creating/updating industry database annually.
  3. Circulate analysis and recommendations to manufacturing units.

ACTION BY:
NPC, Industry Associations

ADVANTAGES EXPECTED:
Creation of awareness and competitive spirit in productivity improvement.

PROPOSAL:

  • Related to: Information
  • In respect of: Awareness

SHORT TERM – NON-AVAILABILITY OF NEW TELEPHONES (Ref. No. 2.14)

PRESENT SITUATION:
In some areas, release of new telephones has not improved for over 10 years.

CHANGE/ACTION DESIRED:

  1. Install satellite exchanges around main exchange.
  2. Increase capacity via electronic exchanges.
  3. Separate Telephone Dept. from Post & Telegraph Dept.
  4. Accept deposits with higher interest and give tax benefits.
  5. Allow private participation.

ACTION BY:
Ministry of Communication, GOI

ADVANTAGES EXPECTED:
Improved telecommunication facilities.

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

SHORT TERM – INCENTIVE FOR POWER CONSUMPTION AT NIGHT (Ref. No. 2.15)

PRESENT SITUATION:
Night power demand is ~15% of daytime peak → under-utilisation of power stations. Charges are same.

CHANGE/ACTION DESIRED:

  1. Separate metering for night consumption with concessional rates.
  2. Exempt night consumption from electricity duty.
  3. Provide 30% concession in energy charges.

ACTION BY:
State Govt. and Electricity Boards

ADVANTAGES EXPECTED:
Increase night demand, reduce peak shortages.

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

SHORT TERM – PARALLELING GENERATORS WITH GRID SUPPLY (Ref. No. 2.16)

PRESENT SITUATION:
Captive generators are not allowed to run parallel with grid → under-utilisation.

CHANGE/ACTION DESIRED:
Allow paralleling with grid using protective devices (reverse power relay, under-frequency relay).

ACTION BY:
State Electricity Boards/Licensees

ADVANTAGES EXPECTED:

  1. Better utilisation, reduced wear & cost
  2. Savings in grid power for redistribution

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: State Electricity Board

SHORT TERM – OCTROI DUTY (Ref. No. 2.17)

PRESENT SITUATION:
Vehicles queue at Nakas → time loss, traffic jams, safety hazards.

CHANGE/ACTION DESIRED:

  1. Abolish octroi duty
  2. Compensate via alternative taxation (like sales tax)

ACTION BY:
State Govt. and Municipal Corporations

ADVANTAGES EXPECTED:

  1. Better vehicle utilisation
  2. Elimination of administrative burden

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

SHORT TERM – GAP IN EDUCATION & INDUSTRY REQUIREMENT (Ref. No. 2.18)

PRESENT SITUATION:

  1. Gap between technical education and industry needs
  2. Lack of practical attitude development

CHANGE/ACTION DESIRED:

  1. Encourage industry-institute interaction
  2. Industry involvement in curriculum & training
  3. Industry representation in governing bodies
  4. Include industry representatives in academic bodies
  5. Industry adoption of institutions

ACTION BY:
Ministry of Education; Universities; Industry

ADVANTAGES EXPECTED:

  1. Need-based curriculum
  2. Better industry-ready students

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

SHORT TERM – EXCISE DUTY ON EQUIPMENT MANUFACTURED FOR OWN USE (Ref. No. 2.19)

PRESENT SITUATION:
Excise duty payable on machinery made for own use.

CHANGE/ACTION DESIRED:
Exempt such machinery from excise duty; withdraw amended notification 105/82.

ACTION BY:
Finance Ministry, Govt. of India

ADVANTAGES EXPECTED:

  1. Encourage indigenous technology
  2. Reduce capital investment
  3. Reduce imports → save forex

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

SHORT TERM – OBSOLETE PRODUCTS (Ref. No. 2.20)

PRESENT SITUATION:
Inefficient products based on obsolete technologies exist in market.

CHANGE/ACTION DESIRED:

  1. Continuous technology assessment
  2. Periodic in-company marketing audits

ACTION BY:
Industry

ADVANTAGES EXPECTED:

  1. Higher value realisation
  2. Improved marketability

PROPOSAL:

  • Related to: Marketing & Technology
  • In respect of: Company policy

SHORT TERM – ATTRACTING FOREIGN COLLABORATORS AND INVESTORS (Ref. No. 2.21)

PRESENT SITUATION:
Top collaborators/investors are not attracted to India.

CHANGE/ACTION DESIRED:

  1. Reduce taxation on royalties & fees
  2. Ensure payments within 3 weeks (without RBI delays)
  3. Simplify collaboration procedures
  4. Improve promotion of Indian opportunities
  5. Enter double taxation agreements

ACTION BY:
Government and Industry

ADVANTAGES EXPECTED:

  1. Better technology inflow
  2. Improved exports

PROPOSAL:

  • Related to: Marketing, Technology, Finance
  • In respect of: Government Policy

SHORT TERM – LICENSED CAPACITY (Ref. No. 2.22)

PRESENT SITUATION:

Restrictions on production due to licensed capacity limits.

CHANGE/ACTION DESIRED:

Industrial licences should specify only the product line and not the capacity limits.

ACTION BY:

Government of India

ADVANTAGES EXPECTED:

  1. Greater optimisation of investments
  2. Increased output
  3. Freer play of market forces
  4. Elimination of use of Letters of Intent for pre-empting development of competition

PROPOSAL:

  • is related to: Marketing
  • in respect of: Government Policy

SHORT TERM – PRICE/PURCHASE PREFERENCES (Ref. No. 2.23)

PRESENT SITUATION:

Public Sector organisations receive price/purchase preferences that place Private Sector organisations at a disadvantage.

CHANGE/ACTION DESIRED:

  1. Revoke circular of Bureau of Public Enterprises which permits price/purchase preferences.

ACTION BY:

Government of India

ADVANTAGES EXPECTED:

  1. Freer competition
  2. Reduction in investment costs
  3. Greater stimulus to improvement of Public Sector efficiency

PROPOSAL:

  • is related to: Marketing
  • in respect of: Government Policy

SHORT TERM – COMPUTATION OF TAX BENEFITS U/S. 80 I OF I.T. ACT, 1961 (Ref. No. 2.24)

PRESENT SITUATION:

25% of the profits from a new undertaking is exempted from income-tax for 7 years. When a new undertaking is established as a division of an existing undertaking, the common expenses like infrastructural services, head office expenses and financing charges are allocated on an ad-hoc basis in computing the profits.

This involves considerable efforts in data collection, auditing and satisfying the I.T.O.

CHANGE/ACTION DESIRED:

The tax exemption be given as a percentage of VALUE ADDED viz. Sales value less Direct material cost, where only two sets of figures will be required to be computed.

Deduction @ 5% of Value Added be allowed while computing the taxable profits.

Section 80 I of the I.T. Act, 1961, be suitably amended to give effect to the above change.

ACTION BY:

Ministry of Finance – Govt. of India

ADVANTAGES EXPECTED:

Simplification of procedure for computing deduction in respect of profit attributable to new industrial undertaking.

PROPOSAL:

  • is related to: Direct taxes
  • in respect of: Govt. policies/procedures

SHORT TERM – BANK CHARGES (Ref. No. 2.25)

PRESENT SITUATION:

Bank charges for transfer of funds and issue of demand drafts are on the basis of value of transaction instead of on transaction basis, thereby increasing the costs.

CHANGE/ACTION DESIRED:

Banks should charge service charges for transfer of funds and also for issue of demand drafts for companies on a flat rate as follows:

i) Rs. 25 per demand draft/mail transfer
ii) Rs. 50 per telegraphic transfer

RBI to issue directive to all banks to follow the above norm uniformly.

ACTION BY:

Reserve Bank of India

ADVANTAGES EXPECTED:

i) Rationalisation of service charges
ii) Reduction in expenses to the clients of the banks

PROPOSAL:

  • is related to: Finance
  • in respect of: Govt. policies/procedure

SHORT TERM – QUARTERLY RETURNS UNDER CHORE COMMITTEE (Ref. No. 2.26)

PRESENT SITUATION:

The formats suggested by Chore Committee which are intended for reviewing the performance of the borrowers, are very exhaustive and cumbersome. The banks themselves do not find time to carry out the review, thus resulting in avoidable administrative efforts.

CHANGE/ACTION DESIRED:

The latest audited Annual Accounts and the data furnished in the CAS application be used by the banks for carrying out the review.

RBI to issue instructions to banks to rely on audited Annual Accounts and CAS forms for review and not to insist on quarterly returns prescribed by Chore Committee.

ACTION BY:

Reserve Bank of India

ADVANTAGES EXPECTED:

Unnecessary paper work is avoided.

PROPOSAL:

  • is related to: Finance
  • in respect of: Govt. policies/procedures

TIME DELAYS IN PROCESSING CAS APPLICATIONS & INTERIM RELIEF (Ref. No. 2.27)

PRESENT SITUATION:

The CAS applications are being scrutinised by concerned branches of banks, then by banks' central offices and then by RBI. Since too many agencies are involved, there are delays in processing the applications.

In view of the time delay experienced by industry in obtaining clearance on CAS applications, the Marathe Committee has recommended immediate release of funds subject to the five specified conditions being satisfied.

RBI has instructed the banks in turn to release 50% of the funds immediately. However, the banks are hesitant to release the funds to borrowers till the clearance of CAS applications by RBI. This upsets the financial planning of the borrowers.

CHANGE / ACTION DESIRED:

  1. The CAS application be received by the bank's zonal offices through their branches without scrutiny by the branches.
  2. The bank's zonal office, RBI and the clients to sit together to sort out the problems.
  3. The CAS application should be cleared by zonal office and RBI within 60 days.
  4. RBI to issue strict instructions to banks to follow its directives based on Marathe Committee recommendations in respect of interim release of funds.

ACTION BY:

Reserve Bank of India

ADVANTAGES EXPECTED:

  1. Duplication of scrutiny can be avoided.
  2. The correspondence amongst RBI, bank and client can be avoided.
  3. Pending clearance of CAS application, the borrowers will have interim relief.

PROPOSAL:

  • is related to: Finance
  • in respect of: Govt. policies/procedures

CREDIT RATIOS (Ref. No. 2.28)

PRESENT SITUATION:

In evaluating the credit limits of industrial machinery manufacturers, the credit ratios normally applied for all other industries are also being used, viz.,

  • Debt Equity ratio : 2 : 1
  • Current ratio : 1.5 : 1

Since the manufacturers of industrial machinery fall under capital intensive industry, the above norms are not relevant.

CHANGE / ACTION DESIRED:

The financial institutions and the banks to relax the credit ratios for industrial machinery sector.

The Ministry of Finance to suggest the following credit ratios for industrial machinery sector:

  • Debt Equity ratio : 3 : 1
  • Current ratio : 1.2 : 1

ACTION BY:

Ministry of Finance - Government of India

ADVANTAGES EXPECTED:

The Ministry of Finance to suggest the following credit ratios for industrial machinery sector.

PROPOSAL:

  • is related to: Finance
  • in respect of: Govt. policies/procedures

COUNTERVEILING DUTY (Ref. No. 2.29)

PRESENT SITUATION:

Levy of counterveiling duty on the components imported which are already being manufactured in India.

CHANGE / ACTION DESIRED:

Counterveiling duty charged should be refunded if the item is used for manufacturing a product falling under the same tariff item.

Issue public notice to the above effect.

ACTION BY:

Ministry of Finance - Govt. of India

ADVANTAGES EXPECTED:

  1. Cost reduction
  2. Avoidance of anomaly

PROPOSAL:

  • is related to: Indirect taxes
  • in respect of: Govt. policies/procedures

SAIL NON-SUPPLY (Ref. No. 2.30)

PRESENT SITUATION:

Actual Users (AUs) are required to register their demands for Iron & Steel raw materials with the local office of SAIL on a quarterly basis. Any demand not met are expected to be carried forward to the next registration on a perpetual basis. In case the AUs desire to import the same, they must apply through the Iron & Steel Controller attaching replies from indigenous manufacturers. However, SAIL does not give any reply as to whether the demands registered with them were met or not. With the result, separate correspondence is required again with producers to satisfy the Iron & Steel Controller in support of the import application. This creates rework and there is total uncertainty as to the availability of raw materials.

CHANGE / ACTION DESIRED:

On request, the local SAIL office should issue a "Certificate of Non Supply" against demand registered with them to every Actual User.

SAIL should be directed to issue non-supply certificates within 30 days of the end of the quarter against demands registered with them.

Iron & Steel Controller should treat such certificates as evidence of indigenous non-availability to clear import applications.

ACTION BY:

SAIL / Iron & Steel Controller
Ministry of Steel & Mines, GOI

ADVANTAGES EXPECTED:

  1. Reduction in correspondence / paper work
  2. Some certainty about supply of Iron & Steel raw materials allowing AUs to plan production programmes accordingly

PROPOSAL:

  • is related to: Materials
  • in respect of: Availability

PRICE REVISIONS (Ref. No. 2.31)

PRESENT SITUATION:

Steel plates, steel structurals, pig iron, non-ferrous metals and coal are the basic input materials in Industry. Frequent and unpredictable price increases of these items cause price instability of the finished products and also embarrassing situations in price fixation.

CHANGE / ACTION DESIRED:

  1. SAIL/CIL to be allowed to review their prices only once a year – April.
  2. MMTC to be allowed to review their prices only once a quarter.

ACTION BY:

SAIL and MMTC
Ministry of Steel & Mines, Ministry of Commerce, GOI

ADVANTAGES EXPECTED:

Price stability, better forecasting.

PROPOSAL:

  • is related to: Materials
  • in respect of: Expenses

SHORT TERM – IMPORT PROTECTION

Ref. No. 2.32

PRESENT SITUATION:

Import protection is being given to indigenous products irrespective of value added in the country. This results in high cost to the end user with no appreciable savings in foreign exchange.

e.g. Production of seamless stainless steel tubes from imported mother-tubes. The value added by the indigenous producer is hardly 10–15% at world prices. Corresponding cost addition by such manufacturers is more than 100%.

CHANGE / ACTION DESIRED:

Remove import protection to products where indigenous value added is less than 33% at world prices.

ACTION BY:

DGTD, CCI & E

ADVANTAGES EXPECTED:

  1. Reduction in cost to the end user.
  2. More productive utilisation of foreign exchange and other scarce resources.

PROPOSAL:

  • is related to: Materials
  • in respect of: Govt. policy/procedures, Expenses

SHORT TERM – FORGING IMPORT

Ref. No. 2.33

PRESENT SITUATION:

  1. Steel Forgings of all types, irrespective of specification and size have been included in Appendix 3-A of Import Policy Book (1985–88) as ‘Limited Permissible Items’.
  2. Indigenous capability is limited to a single piece weight of 3 MT for discs and 1.5 MT for rings/flanges/nozzles.
  3. For higher weight forgings, Actual Users (AUs) have to depend on imports, but have to apply for specific supplementary licences every time resulting in unnecessary paperwork and delay in imports.

CHANGE / ACTION DESIRED:

The existing description under Sl. No. 579 of App. 3-A of Import Policy Book 1985–88 should be amended to read as follows:

“Steel Forgings – Excluding the following:”

a) Discs having single piece weight exceeding 3 MT or diameter exceeding 1800 mm
b) Rings having single piece weight exceeding 1.5 MT or diameter exceeding 2000 mm or thickness exceeding 450 mm
c) Flanges/Nozzles having single piece weight exceeding 1.5 MT

ACTION BY:

Import Policy Cell, DGTD; CCI & E

ADVANTAGES EXPECTED:

  1. Reduction in time required to import forgings which are frequently required by the equipment manufacturers.
  2. Reduction in paperwork.

PROPOSAL:

  • is related to: Materials
  • in respect of: Govt. policy, Availability, Expenses

SHORT TERM – STAINLESS STEEL PLATES IMPORT

Ref. No. 2.34

PRESENT SITUATION:

Stainless steel (SS) Plates having thickness above 12 mm are not produced indigenously and can be imported directly by actual users (AUs) if the width is more than 1.25 mtrs. However, if width is less than 1.25 mtrs, the import is canalised through MMTC.

SS plates are generally used in the manufacture of tailor-made equipment and are required in an assortment of widths in each thickness. Rolling mills also generally prefer to group all widths in one thickness for economy.

The present policy forces AUs to split the quantity in every thickness for procurement partly through MMTC and partly directly. This results in doubling the paperwork and also possibly higher prices which foreign suppliers may charge due to small quantities.

CHANGE / ACTION DESIRED:

Stainless Steel Plates above 12 mm in thickness and having width below 1.25 mtrs should also be decanalised.

App. 5, Part A, Sl. No. 52(v) of the Import Policy 1985–88 should be amended to read as follows:
“Stainless Steel Plates of thickness above 12 mm”

ACTION BY:

Import Policy Cell, DGTD; CCI & E

ADVANTAGES EXPECTED:

  1. Reduction in paperwork
  2. Improved material utilisation
  3. Better import prices with savings in foreign exchange

PROPOSAL:

  • is related to: Materials
  • in respect of: Govt. policy, Availability, Expenses

SHORT TERM – FLEXIBILITY FOR APP. 3 IMPORT

Ref. No. 2.35

PRESENT SITUATION:

  1. Until 1984–85 a licence holder could utilise 10% value of his automatic licence for importing limited permissible items. Under the current policy there is no provision for import of such items since automatic licensing procedure has been abolished.
  2. Due to change in the policy, an Actual User now has to specifically apply for a Supplementary Licence if he needs the material covered by Appendix-3 irrespective of its value. Considerable delays in the grant of Supplementary Licence affect industrial production.

CHANGE / ACTION DESIRED:

It is, therefore, suggested that the Actual Users be given some flexibility in getting their small value requirements of Appendix-3 items to achieve their targets of industrial production. Some of the suggestions are:

a) An Automatic Supplementary Licence for import of App. 3 items equivalent to 1% of the production of the unit should be permitted as is presently being done in case of spare parts for after-sales service (see para 110(1), Chapter IV of Import Policy).

b) An Automatic Supplementary Licence based on the consumption.

ACTION BY:

Import Policy Cell, DGTD; CCI&E (Ministry of Commerce), GOI

ADVANTAGES EXPECTED:

If the above suggestion is accepted, the industrial units will get flexibility to procure their small value requirements of Appendix-3 items. This will further reduce the large number of supplementary applications as the industrial units would submit an application only if their requirements cannot be met under the facility of Automatic Supplementary Licence as suggested above.

PROPOSAL:

  • is related to: Materials
  • in respect of: Govt. policy/procedures

SHORT TERM – DISPOSAL OF IMPORTED MATERIAL

Ref. No. 2.36

PRESENT SITUATION:

  1. Under Para 104 to 107 of the Hand Book of Import-Export Procedures, 1985–88, an elaborate procedure for sale or transfer of imported material has been laid down in the Import Policy for such imported items that become obsolete over a period of time.
  2. However, in case of sale or transfer of capital goods a simple procedure has been laid down vide Para 114(1) of the Hand Book of Import-Export Procedures, 1985–88, whereby the Actual User does not need prior permission of the Government for disposal of Capital Goods if a period of 10 years has elapsed from the date of import of such Capital Goods.

CHANGE / ACTION DESIRED:

It is suggested that in case of obsolete imported components and also raw materials, the procedure presently being followed in respect of Capital Goods, Para 114(1), be made applicable with the exception that the period in the case of Raw Materials/Components be reduced to 5 years.

ACTION BY:

Import Policy Cell, DGTD; CCI&E (Ministry of Commerce), GOI

ADVANTAGES EXPECTED:

If the above suggestion is accepted, the industrial units that have obsolete stocks of imported components and raw materials will be able to dispose of such components/raw materials after 5 years without resorting to the lengthy procedure as laid down in the current Policy, which makes the disposal of obsolete materials almost impossible.

PROPOSAL:

  • is related to: Import Policy Cell, DGTD
  • in respect of: CCI&E (Ministry of Commerce), GOI

SHORT TERM / LONG TERM – STOCK OPTION TO EMPLOYEES (Ref. No. 2.44)

PRESENT SITUATION:
The Government has on Aug. 1, 1985, already placed before the Parliament two important schemes –
(i) Employees' Stock Option Scheme (Employees' convertible debentures scheme) and
(ii) Reservation of 5% of all new issues including rights issues for the employees.

However, the schemes are based primarily on save-as-you-earn principle, with a view to encouraging thrift. But, as the benefits accruing from such schemes are taxable for the employees, these schemes are unlikely to find enthusiastic support.

CHANGE/ACTION DESIRED:
The income accruing out of Employees' Stock Option Scheme (Employees' Convertible Debentures Scheme) be allowed as an allowable deduction under Sec. 80J of the Income Tax Act for the individual participating in such a scheme.

ACTION BY:
Ministry of Company Affairs & Ministry of Finance, Government of India

ADVANTAGES EXPECTED:

  • Tax benefits will attract wider participation by employees.
  • Employees' commitment in improving profitability of the company will be high.

PROPOSAL:

  • Related to: Human resources/Finance
  • In respect of: Govt. policy/procedure

SHORT TERM – PRODUCTIVITY TRAINING (Ref. No. 2.45)

PRESENT SITUATION:
The concern for productivity improvement is generally considered by trade unions as a responsibility of Management alone. As evident from the survey report of the Board, Trade Unions are not opposed to improvement in productivity, although they may have apprehension of the present concept of productivity movement.

CHANGE/ACTION DESIRED:

  • At the plant level arrangement should be made for training of workmen, trade union office bearers and supervisors connected with production for bringing about productivity awareness and to make them conscious of their role in the improvement of productivity.
  • Trade unions representing workmen should take initiative to develop proper productivity-oriented outlook along with their task of protecting workers' rights and interests in wages, productivity gains, and job security.

ACTION BY:
Trade Union Organisations
Ministry of Labour, Govt. of India

ADVANTAGES EXPECTED:

  • Better chances of meaningful discussions between Management and Unions on productivity-related issues.

PROPOSAL:

  • Related to: Human Resources
  • In respect of: Govt. policy/procedure

SHORT TERM – SHARING OF PRODUCTIVITY GAINS (Ref. No. 2.46)

PRESENT SITUATION:
The present incentive schemes available in some industrial machinery units do not succeed in motivating employees. In many organisations such schemes are not available. As a result, workers' participation in improving productivity is not forthcoming.

CHANGE/ACTION DESIRED:
Appropriate production incentive schemes to be prepared and introduced by most industrial units to ensure proper sharing in productivity gains. Higher share may be given where wage levels are low.

ACTION BY:
National Productivity Council to develop a model scheme.

ADVANTAGES EXPECTED:

  1. Employees will actively participate in productivity improvement programmes.
  2. Employees with low wages will get additional income and improved living standards.

PROPOSAL:

  • Related to: Human Resources
  • In respect of: Company Policy

SHORT TERM – LAST DATE SUPPL. LICENCE APPLICATION (Ref. No. 2.37)

PRESENT SITUATION:

  1. As per Import Policy 1985–88, last date for supplementary licence application is 15th December 1985.
  2. Orders received in early December cannot be processed before deadline. Applications must wait till April 1986, causing 4-month delay. This is too long for industrial machinery manufacturers with custom requirements.

CHANGE/ACTION DESIRED:

  • Extend last date to 31st March OR
  • Allow Regional Licensing Authority to apply provisions of Para 37.

ACTION BY:
Import Policy Cell, DGTD – CCI&E (Ministry of Commerce)

ADVANTAGES EXPECTED:

  • Reduced lead time for procurement of imported inputs.

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policy/procedures

SHORT TERM – IMPORT OF STEEL PLATES (Ref. No. 2.38)

PRESENT SITUATION:

  1. Steel plates fall under limited permissible items requiring supplementary licence.
  2. Indigenous supply is limited and mostly allocated to priority sectors.

CHANGE/ACTION DESIRED:
Shift these items to Open General Licence (OGL) via Public Notice.

ACTION BY:
Import Policy Cell, DGTD
CCI&E (Ministry of Commerce)

ADVANTAGES EXPECTED:

  • Easier import based on demand
  • Procurement time reduced by 3–4 months

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policy/procedures

SHORT TERM – LIST ATTESTATION PROCEDURES (Ref. No. 2.39)

PRESENT SITUATION:
DGTD units must get attestation even for OGL imports under Import Policy 1985–88, causing unnecessary procedures.

CHANGE/ACTION DESIRED:

  • Units that completed PMP should not require attestation
  • Delete Para 94(11)

ACTION BY:
Import Policy Cell, CCI&E (Ministry of Commerce), GOI

ADVANTAGES EXPECTED:

  • Faster procurement of imported inputs

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policy/procedure

SHORT TERM – SHIPMENT OF IMPORTED GOODS (Ref. No. 2.40)

PRESENT SITUATION:
Imports can only occur after licence issue, causing 2–3 month delays.

CHANGE/ACTION DESIRED:
Allow shipment after application submission (before licence), provided:

  • Shipment date ≥ application date
  • Licence is available before goods arrive

ACTION BY:
Import & Export Policy Cell
CCI&E
Customs Department

ADVANTAGES EXPECTED:

  • Delivery time reduced by 2–3 months

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policy/procedures

SHORT TERM – TESTING FACILITY (Ref. No. 2.41)

PRESENT SITUATION:
Small-scale units cannot afford testing facilities; dependence on parent units is inconvenient.

CHANGE/ACTION DESIRED:

  • ISI or central bodies to set up shared facilities
  • Fast services via National Test Houses

ACTION BY:
ISI
Ministry of Industry
Development Commissioner (SSI)

ADVANTAGES EXPECTED:

  • Quick quality feedback
  • Better control on raw materials

PROPOSAL:

  • Related to: Infrastructure, Materials
  • In respect of: Availability

SHORT TERM – INDUSTRIAL RELATIONS MACHINERY (Ref. No. 2.42)

PRESENT SITUATION:
Delays in industrial dispute settlements due to weak laws and prolonged court processes.

CHANGE/ACTION DESIRED:

  1. Amend Industrial Disputes Act
  2. Establish proper machinery at central & state levels

ACTION BY:
Ministry of Labour
Ministry of Law & Justice

ADVANTAGES EXPECTED:

  • Faster dispute resolution
  • Increased faith in judicial system

PROPOSAL:

  • Related to: Human Resources
  • In respect of: Govt. policy/procedure

SHORT TERM – EMPLOYMENT EXCHANGES (Ref. No. 2.43)

PRESENT SITUATION:
Employment exchanges have failed to coordinate opportunities effectively.

CHANGE/ACTION DESIRED:

  • Create District Level Employment Boards with participation from:
    • Educational institutions
    • ITIs
    • Industry bodies
    • Trade unions
  • Prepare district manpower plans

ACTION BY:
Ministry of Labour, Government of India

ADVANTAGES EXPECTED:

  • Realistic manpower planning
  • Better alignment of education with industry needs

PROPOSAL:

  • Related to: Human resources
  • In respect of: Govt. policy/procedure

RECOMMENDATIONS FOR ‘LONG-TERM’ IMPLEMENTATION

LONG TERM – STANDARDIZATION OF QUALITY NORMS (Ref. No. 3.01)

PRESENT SITUATION:

Manufacture of Industrial machinery has to cater to widely varying requirements of different inspection and quality surveillance agencies. This leads to cumbersome and non-standardized quality control procedures which are counter-productive. For example, in a typical situation, the Company has to contend with as many as 23 external inspection agencies whose requirements are many times at variance.

Also there is a multiplicity of standards being followed by the Industrial Machinery Manufacturing Sector – e.g. API, ANSI, DIN, ISI, ISO, JIS, etc. These are in terms of various codes of design being followed for threads, flanges, motor ratings, etc., causing lack of standardization.

CHANGE/ACTION DESIRED:

A uniform QC code should be established applicable to various items covered under Industrial Machinery. Various inspection/surveillance agencies should be asked to follow the common code. This could be formulated in tune with well-known International codes such as ASME, DIN, JIS, etc.

NPC should initiate a dialogue with ISI and various industries and come up with a time-bound programme for this purpose. The existing IS code 2825 should be completely modified and its scope enlarged.

ACTION BY:

PBIM/NPC, Industry.

ADVANTAGES EXPECTED:

Streamlining of manufacturing and inspecting methods will significantly help improvement in productivity.

PROPOSAL:

  • is related to: Manufacturing Services
  • in respect of: Awareness

EXAMPLES:

  1. The IBR, including the latest notifications, do not cover even such commonly used materials like stainless steels. There is an urgent need to update the regulations in this respect.
  2. Although the Indian Boiler Act was initiated by the Central Govt., the implementation has been delegated to various States through the respective inspectors. The co-ordination at the Central level is minimal. This results in widely differing levels of implementation and interpretation. Drawings and other documents which meet the approval of one State do not get approved by other States. This leads to considerable duplication of efforts and paper work.

LONG TERM – ENERGY FROM MUNICIPAL WASTES (Ref. No. 3.02)

PRESENT SITUATION:

Treatment and disposal of domestic effluents and solid wastes (garbage) is the responsibility of municipal bodies. In India, as of now, the treatments given to the liquid and solid wastes are elementary and cause environmental pollution, e.g. liquid domestic wastes are given primary treatment and left out into the sea or rivers. In some cases even this is not done. The solid wastes are dumped in dumping grounds.

Due to lack of resources (financial and technical) in the hands of municipalities, no attempt is being made to convert these inexhaustible and uninterrupted supply of wastes into energy (through process of incineration), compost, recycling of metal scrap or converting them into safe land-fills. This concept has gained wide popularity in the U.S., Western Europe and Japan and is emerging to be a multi-million dollar business.

CHANGE/ACTION DESIRED:

  1. Private industry should be encouraged to set up energy utilities and compost-making plants by guaranteeing them free supply of municipal wastes. To begin with, some govt. compulsion/thrust may be required to make such schemes viable till such time the idea catches on.
  2. Income accruing out of investment in this area should be entirely exempted from income tax for a period of 10 years.

ACTION BY:

Dept. of Environment, GOI
Dept. of Energy, GOI
Dept. of Industry, GOI
PBIM/NPC

ADVANTAGES EXPECTED:

  1. National level savings by recycling.
  2. New avenues for industries.
  3. Financial relief to local municipal bodies.
  4. Cleaner environment.

PROPOSAL:

  • is related to: Technology, Infrastructure
  • in respect of: Govt. policy/procedure, Motivation

LONG TERM – STANDARDIZATION (Ref. No. 3.03)

PRESENT SITUATION:

Industry Machinery Manufacturing sector lacks sufficient standardization at the national level. This sector invariably depends on codes/standards from other countries and practice followed by their overseas collaborators. This results in a wide variety of manufacturing and inspection requirements, which are not always adapted to Indian conditions.

IS Specifications made by ISI on the subject have not been updated to take care of present state of technology and various other changes.

CHANGE/ACTION DESIRED:

  • Conscious efforts by industry with its customers and suppliers to bring about standardization at national level.
  • Industrial groups to work out code of practice for standardization, practise for 2 to 3 years and then convert to ISI requirements.
  • Evolution and updating of national standards (ISI) to incorporate latest technological developments on a continuing basis. ISI to update/revise present specifications every 5 years.
  • Policy decision by user groups (especially large houses) to adopt ISI, followed by purchasing & manufacturing preference for ISI marked/certified products and time-bound programme for effective implementation.

ACTION BY:

Individual Units, Industry Associations, ISI

ADVANTAGES EXPECTED:

  • Standardization in the long run will lead to better quality, lower cost and ease of maintenance.
  • ISI relates to Indian environment and hence will be effective and easy to comply with.

PROPOSAL:

  • is related to: Quality Control
  • in respect of: Procedures

LONG TERM – INDUSTRIAL SAFETY (Ref. No. 3.04)

PRESENT SITUATION:

  1. Generally low safety consciousness in industry resulting in loss of production resources.
  2. Factory Act and State factory rules need updating with respect to compatibility in present technology and industrial environment.

CHANGE/ACTION DESIRED:

  • NPC/National Safety Council (NSC) should draft a safety policy & make it compulsory to all industrial units on finalisation.
  • Factories Act and applicable rules should be amended with respect to present state of technology and industrial environment. A provision should be made for simplified dismissal and misconduct proceedings for defaults on account of safety measures by workmen.
  • A separate unit should be established within NSC to advise industrial units on safety matters and equipment.

ACTION BY:

  1. National Safety Council/NPC
  2. Govt. of India/State Governments

ADVANTAGES EXPECTED:

  1. Improved capacity utilisation.
  2. Boost in morale of the working class.

PROPOSAL:

  • Related to: Human Resources
  • In respect of: Awareness

LONG TERM – IMPORTED COMPUTERS – MAINTENANCE (Ref. No. 3.05)

PRESENT SITUATION:

Computer Maintenance Corporation (CMC) is the only organisation authorised to maintain imported computer systems. Users are not assured of restoring systems within committed time.

CHANGE/ACTION DESIRED:

  • Users should be free to select any agency (CMC, manufacturer, representatives, or others) for maintenance.
  • Department of Electronics should encourage more agencies and act as catalyst by providing licensing facilities and easier import of spares.

ACTION BY:

Department of Electronics, Govt. of India

ADVANTAGES EXPECTED:

  1. Reduction in downtime
  2. Reduction in maintenance cost

PROPOSAL:

  • Related to: Information Technologies
  • In respect of: Govt. policy/procedures

LONG TERM – INDUSTRIAL LICENSING – RATIONALISATION (Ref. No. 3.06)

PRESENT SITUATION:

  1. Licensing required for 27 priority industries causes delays.
  2. Exclusion of other important industries like boilers, turbines, telecom equipment, machinery, etc.

CHANGE/ACTION DESIRED:

  1. Add more industries to MRTP exemption list.
  2. Delicense these industries under Industries (D&R) Act.

ACTION BY:

Ministry of Industry, Govt. of India

ADVANTAGES EXPECTED:

  • Reduced project lead time
  • Better capacity utilisation
  • Lower cost expansion
  • Clarity in industrial sector

PROPOSAL:

  • Related to: Industrial Licensing
  • In respect of: Govt. policy/procedures

LONG TERM – LICENSING: NO INDUSTRY DISTRICTS (Ref. No. 3.07)

PRESENT SITUATION:

Entrepreneurs are required to select “No Industry Districts” (NID), but benefits are not adequate compared to infrastructure challenges and delays.

CHANGE/ACTION DESIRED:

  1. Focus on underdeveloped talukas instead of districts
  2. Encourage investment in “No Industry Talukas”
  3. Provide attractive financial incentives

ACTION BY:

Ministry of Industry, Govt. of India

ADVANTAGES EXPECTED:

  • Wider location choices
  • Better infrastructure utilisation
  • Improved administration

PROPOSAL:

  • Related to: Industrial Licensing
  • In respect of: Govt. policy/procedures

LONG TERM – ONE WINDOW APPROVAL & INFRASTRUCTURE (Ref. No. 3.08)

PRESENT SITUATION:

Infrastructure approvals require coordination across multiple departments causing delays.

CHANGE/ACTION DESIRED:

  • Create a single authority for approvals/NOCs
  • Authority to coordinate with all departments

ACTION BY:

Central/State Govt. & Municipalities

ADVANTAGES EXPECTED:

  1. Reduced coordination time
  2. Reduced project gestation period
  3. Faster project execution
  4. Lower administrative cost

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

ANNEX TO PROPOSAL NO. 3.08

MUNICIPALITY DEPARTMENTS:

  • Building proposals
  • Town planning
  • Hydraulic engineer
  • Storm water
  • Fire officer
  • Road & traffic
  • Revenue & forest/garden

STATE GOVT. DEPARTMENTS:

  • Industries, Energy & Labour
  • Power supply
  • Police
  • Pollution control
  • Land records & survey
  • Chief inspector of factories
  • Collector & Tahsildar
  • Public works

CENTRAL GOVT.:

  • Civil aviation
  • Explosives controller
  • Railways
  • Dept. of Communication

LONG TERM – PERMISSION FOR USE OF EPABX (Ref. No. 3.10)

PRESENT SITUATION:

EPABX requires multiple approvals and takes 1–2 months with conditions like testing, maintenance takeover, and rental charges.

CHANGE/ACTION DESIRED:

  1. EPABX usage without conditions
  2. P&T to terminate junction lines after inspection
  3. Maintenance responsibility on owner

ACTION BY:

Ministry of Communications

ADVANTAGES EXPECTED:

  1. Faster permissions
  2. Cost & time savings
  3. Reduced repair expenses

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

LONG TERM – TRANSPORT OF OVER DIMENSIONAL CONSIGNMENTS (Ref. No. 3.11)

PRESENT SITUATION:

ODC transport requires multiple permissions and surveys causing delays.

CHANGE/ACTION DESIRED:

  1. Publish state-wise road directory
  2. Publish authority contact details
  3. Annual updates by Ministry of Transport
  4. Sell directory at reasonable price

ACTION BY:

Central & State Governments

ADVANTAGES EXPECTED:

  1. Reduced survey effort
  2. Faster project execution
  3. Easier planning

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

LONG TERM – HIGH CAPACITY WAGONS FOR ODC (Ref. No. 3.12)

PRESENT SITUATION:

Railways limited to 90–130 tons wagons; insufficient capacity; reliance on costly road transport.

CHANGE/ACTION DESIRED:

  1. Develop 300-ton wagons
  2. Procure sufficient wagons
  3. Use deposit-based funding model

ACTION BY:

Indian Railways

ADVANTAGES EXPECTED:

  • Lower transport cost
  • Reduced project cost
  • Better delivery efficiency

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

LONG TERM – QUICK PARCEL SERVICE BY PRIVATE SECTOR (Ref. No. 3.13)

PRESENT SITUATION:

  • International courier services exist (e.g., DHL), but domestic equivalent lacking
  • Existing private services limited and informal
  • Causes inconvenience and higher cost

CHANGE/ACTION DESIRED:

Amend Indian Post & Telegraph Act to allow private parcel services

ACTION BY:

Ministry of Communication, Govt. of India

ADVANTAGES EXPECTED:

  1. Faster business communication
  2. Increased employment

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

LONG TERM – LAND FOR INSTITUTES (Ref. No. 3.14)

PRESENT SITUATION:
Prohibitive cost of land particularly in urban areas, is a deterrent for industry to sponsor technical institutes/vocational training centres. Cost of land forms about 35% of the cost of the project.

CHANGE/ACTION DESIRED:
State governments to allot land at concessional price to industry for starting technical institute/vocational centre.

ACTION BY:
State Governments.

ADVANTAGES EXPECTED:
Industries will be motivated to set up technical institutes/vocational centres. Products of such institutes can be well trained in emerging technologies.

PROPOSAL:

  • Related to: Infrastructure
  • In respect of: Govt. policy/procedure

LONG TERM – MARKETING DATA (Ref. No. 3.15)

PRESENT SITUATION:
Data on demographic, economic and demand parameters are inadequate, not up-to-date and not easily accessible.

CHANGE/ACTION DESIRED:

  1. Establishment of a central autonomous bureau to collect, collate and disseminate required data periodically.
  2. Augmentation of professional organisations to conduct specialised studies and for assimilation of data related to specific areas.

ACTION BY:
Government and Industry

ADVANTAGES EXPECTED:

  1. Accurate information for decision making.

PROPOSAL:

  • Related to: Information Technologies
  • In respect of: Availability and Awareness

LONG TERM – DUMPING BY OVERSEAS SUPPLIERS (Ref. No. 3.16)

PRESENT SITUATION:
Overseas suppliers often resort to dumping. They are also in a position to offer short delivery periods which Indian suppliers are not able to.

CHANGE/ACTION DESIRED:

  1. Decanalise purchase of items like steel which is not made in India and place them on OGL.
  2. Grant import licences for components within 3 weeks.
  3. Grant credit to local manufacturers on terms competitive to overseas suppliers' credits.
  4. Duty rates on raw materials and components not to be higher than those on imported finished products.
  5. Reduction of taxes on Royalties, Engineering Fees and Lumpsum Fees.

ACTION BY:
Government

ADVANTAGES EXPECTED:

  1. Improved competitiveness of Indian industry
  2. Better capacity utilisation of Indian Industry

PROPOSAL:

  • Related to: Marketing, Finance and Materials
  • In respect of: Government Policy

LONG TERM – INVESTMENT ALLOWANCE (Ref. No. 3.17)

PRESENT SITUATION:
Deductions in respect of Investment Allowance u/s 32A of the I.T. Act, 1961, is being allowed up to 31st March 1988.
The withdrawal of Investment Allowance will act as an impediment to rapid industrial growth.

CHANGE/ACTION DESIRED:
Investment Allowance be continued beyond 31st March, 1988, subject to a condition that the Investment Allowance Reserve be used for investment in indigenous machinery only.
Section 32A of the I.T. Act, 1961, be amended accordingly.

ACTION BY:
Ministry of Finance – Govt. of India

ADVANTAGES EXPECTED:

  1. The industrial machinery sector being capital intensive, continuation of Investment Allowance is desirable.
  2. Creation of compulsory Investment Allowance Reserve and reinvestment in plant & machinery within a specified period will lead to industrial growth.

PROPOSAL:

  • Related to: Direct taxes
  • In respect of: Govt. policies/procedures

LONG TERM – ELIMINATION OF ZERO TAX SITUATION (Ref. No. 3.18)

PRESENT SITUATION:
Section 80 VVA of the I.T. Act, 1961, restricts availing of various tax benefits to 70% of the taxable profits.

This results in:
a) Discouragement to tax planning efforts of efficient companies
b) Reduction in cash generation in industrial sector

CHANGE/ACTION DESIRED:
The limit placed on availing of various concessions provided under the Act be removed.
Section 80 VVA be omitted from the I.T. Act, 1961.

ACTION BY:
Ministry of Finance – Govt. of India

ADVANTAGES EXPECTED:
The industrial sector will be encouraged to make further growth-oriented investments and will be able to improve liquidity.

PROPOSAL:

  • Related to: Direct taxes
  • In respect of: Govt. policies/procedures

LONG TERM – EXPENDITURE ON TECHNICAL EDUCATION (Ref. No. 3.19)

PRESENT SITUATION:
Industry is experiencing difficulties in getting the right type of technical staff due to the fact that job-oriented technical institutes are inadequate.
Non-availability of tax benefits is one of the major reasons why industries are not inspired to promote technical institutes.

CHANGE/ACTION DESIRED:
Capital as well as Revenue expenditure in respect of technical institutes promoted by industries be allowed to be deducted from the taxable profits of the industries.

The I.T. Act, 1961, to provide for:
i) Weight deduction at 150% in respect of capital expenditure
ii) Deduction at 100% in respect of revenue expenditure on technical institutes set up by industries

ACTION BY:
Ministry of Finance – Govt. of India

ADVANTAGES EXPECTED:
Availability of good technical people in the country

PROPOSAL:

  • Related to: Direct taxes
  • In respect of: Govt. policies/procedures

LONG TERM – COMPANIES ACT, 1956 (QUANTITATIVE INFORMATION) (Ref. No. 3.20)

PRESENT SITUATION:
As per the Companies Act, 1956, all companies have to furnish information in respect of:
a) Consumption of raw materials and components under local and imported category
b) CIF value of imports
c) Information in respect of employees drawing more than Rs. 36,000 per annum
d) Production particulars

CHANGE/ACTION DESIRED:
The information relating to imports and production and salary particulars are already furnished to various government agencies, and as such these can be dispensed with.

i) Changes be introduced in Schedule VI of the Companies Act, 1956
ii) Section 217(2A) of the Companies Act, 1956 be amended

ACTION BY:
Ministry of Industries – Company Law Board

ADVANTAGES EXPECTED:

  • Considerable efforts put in for data collection and auditing can be eliminated
  • Cost of publishing bulky Annual Reports can be reduced

PROPOSAL:

  • Related to: Company law matters
  • In respect of: Govt. policies/procedures

LONG TERM – EXCISE RULE 56-C (Ref. No. 3.21)

PRESENT SITUATION:
When goods are to be sent by primary manufacturer to the secondary manufacturer for processing, the latter has to obtain L4 Excise Licence and follow a rigorous excise procedure even if he is in a small scale sector and his turnover does not exceed Rs. 16.0 lakhs, which is the exemption limit under excise.

Primary manufacturers have to submit monthly returns to excise authorities.

In the entire process, Government does not gain or lose any revenue.

CHANGE/ACTION DESIRED:
Deletion of Rule 56-C.
Amendment to Rule 56-B to accept manufacturers' internal records in lieu of excise forms/registers.

ACTION BY:
Central Board of Excise & Customs
Dept. of Revenue, Ministry of Finance

ADVANTAGES EXPECTED:

  • Record keeping will be simplified
  • No need of L4 Licence for Secondary Manufacturer
  • No loss to small scale manufacturers

PROPOSAL:

  • Related to: Materials
  • In respect of: Govt. policy/procedures

LONG TERM – COMPANY BUYS OWN SHARES (Ref. No. 3.22)

PRESENT SITUATION:
Due to the highly speculative stock market situation, shares of companies are cornered by outsiders. The present system does not allow a company to buy its own shares.

CHANGE/ACTION DESIRED:
Company should be allowed to buy its own shares from funds available under the proposed Employees' Stock Option Scheme.

These shares should be allotted to its employees at concessional rates.

The subsidy thus granted should be allowed as expenditure for employee welfare.

To amend Companies Act to enable individual companies to buy their own shares.

ACTION BY:
Company Law Board
Controller of Capital Issues

ADVANTAGES EXPECTED:

  • This scheme will gradually ensure company’s ownership with its employees
  • Positive step towards sharing of gains with employees

PROPOSAL:

  • Related to: Human resources
  • In respect of: Govt. policy/procedure

LONG TERM – UNIFORMITY IN WAGES AT REGIONAL LEVEL (Ref. No. 3.23)

PRESENT SITUATION:
Disparities in wages in the Industrial Machinery Sector put the employers and the employees at a serious disadvantage. These wage disparities are undesirable.

CHANGE/ACTION DESIRED:

  1. Wage structure
    To constitute tri-partite regional level committees for industrial machinery sector to bring about uniformity in wages, DA schemes and service conditions of employees in selected locations.
  2. Job classification
    Regional productivity councils in various regions to set up committees to evolve/recommend schemes for classification of jobs and submit their reports to the tri-partite committee.

ACTION BY:
National Productivity Council / Local Productivity Councils, Govt. of India, AIEI

ADVANTAGES EXPECTED:
Companies will have workers with similar skills receiving equitable remuneration in each region. A region-based common single wage structure and single linkage DA scheme would eliminate disparities.

PROPOSAL:

  • Related to: Human resources
  • In respect of: Govt. policy/procedure

LONG TERM – TRAINED GOVERNMENT OFFICIALS (Ref. No. 3.24)

PRESENT SITUATION:
Presently the officials in the Government labour departments are not sufficiently exposed to various labour situations in different industries. Their lack of understanding of the problems is due to non-formal exposure to personnel management practices, resulting in ineffective intervention and delays in settlement of disputes.

CHANGE/ACTION DESIRED:
To evolve a Human Resources Development Cadre in the IAS Rank.
Appointments of senior Government officials in the Labour Departments to be made through this cadre.

ACTION BY:
Ministry of Labour
Government of India

ADVANTAGES EXPECTED:
A good cadre of officials with Industrial Relations, Behavioural Sciences and Man Management specifications will change the image and role of Government machinery.

PROPOSAL:

  • Related to: Human Resources
  • In respect of: Govt. policy/procedure

ANNEXURES

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ANNEXURE I – PRODUCTION / PRODUCTIVITY LINKED WAGE-SCHEME

To motivate employees for better productivity and maintain market leadership, additional payment schemes are recommended.

1. Quarterly Ex-gratia Lumpsum Payment

  • Paid after achieving base output of previous quarter
  • Rs. 500 to Rs. 550 depending on wages
  • Base output increases progressively over 3 years
  • Includes predetermined % of spares and accessories

Clause:
Employees shall not demand earlier annual ex-gratia or any other payment during the settlement period.

2. Monthly Incentive Payment

If output exceeds base:

  • Direct workmen: Rs. 75 per unit
  • Indirect workmen: Rs. 65 per unit

Definitions:

  • Direct: engaged in production
  • Indirect: stores, inspection, maintenance, offices, security

Formula:
Actual applicable rate = (Actual Output / Base Output) × Base Rate

EXAMPLE (Direct & Indirect Workmen)

Base output = 16 units
Actual = 18 units

Direct:

  • 17th unit → (17/16 × 75) = 79.70
  • 18th unit → (18/16 × 75) = 84.40
  • Total = 164.10

Indirect:

  • 17th → 69.00
  • 18th → 73.10
  • Total = 142.10

Condition:
If production falls below base in any month → incentive already paid reduced by 50% from quarterly ex-gratia.

EXAMPLES (Case Studies)

Case 1:

  • Oct: 18 → Incentive Rs.164.10
  • Nov: 17 → Rs.79.70
  • Dec: 15 → No incentive

Quarter total > base → Ex-gratia reduced by 50% of 1st unit incentive
Net ex-gratia = Rs.460.15

Case 2:

  • Oct: 18 → Incentive
  • Nov: 14 → None
  • Dec: 14 → None

Quarter total < base → No ex-gratia payable

ANNEXURE II – PRODUCTIVITY MEASUREMENT RATIOS

1. Production Management

1.1 Engineering Workshops

Fabrication Shops

  • Standard Time / Actual Time
  • Estimated Time / Actual Time
  • Allowed Time / Actual Time
  • Electrodes burnt per shift
  • X-ray defects (%)

Machine Shops

  • Actual Time / Standard Time
  • Actual Time / Allowed Time
  • Machine utilization ratio
  • Spares consumption vs depreciation

1.2 Switchgear Manufacturing

  • Link Shop: Kgs per man-hour
  • Fabrication:
    • Steel processed per man-hour
    • Standard hours / Actual hours
  • Paint Shop: Area painted per man-hour
  • Assembly Shops: Man-hour per panel
  • Packing Shops:
    • Per loose box
    • Per case

Note: Compared with standards for productivity measurement

1.3 Earthmoving Machinery Manufacturing

  • Base Hours / Actual Hours
  • Hourly Hours / Base Hours
  • Direct Labour Yield %
    = (Base Hours – Scrap Hours) / (Actual + Rework Hours) × 100
  • Spoilage Ratio
    = (Scrap + Rework) / Base Hours

1.4 Welding Electrode Manufacturing

  • Output per man-hour
  • Standard Hours / Actual Hours

2. Service Management

2.1 Maintenance Department

AC & Refrigeration

  • Tonnage per person

Power Supply

  • % Power cut
  • Units purchased
  • Fuel cost/kWh
  • Cost per unit (purchased vs generated)

Estate Maintenance

  • Floor area per worker
  • Floor area per cleaner
  • Garden area per gardener

2.2 Computer Centre

  • Utilization = Uptime / Total time

2.3 O&M Section

  • Savings achieved
  • Procedures introduced
  • Forms introduced/improved

2.4 Transport

  • Number of accidents

Additional Service Metrics

  • Vehicle-days lost in repairs
  • Fuel consumption of buses
  • Maintenance cost per km
  • Late arrivals
  • Breakdown instances (>8 hrs)
  • Road breakdowns

2.5 Safety

Frequency Rate:

(Number of accidents / Total man-hours) × 1,000,000

Severity Rate:

(Man-days lost / Total man-hours) × 1,000,000

2.6 Canteen

  • Persons fed / Total employees
  • Food sales per employee

2.7 Security

  • Theft cases & value
    • Reported
    • Detected (reported cases)
    • Detected independently

2.8 Overall Service

  • Service expenses / Production value
  • Production per employee
  • Service employees / Total employees

3. MATERIALS MANAGEMENT

3.1 INVENTORY

  • 3.1.1 Mfg. Materials Inventory – value and in terms of DOC (Actual vs. budget)
  • 3.1.2 Work-in-progress Inventory – Value and in terms of Days of Production (Actual vs. budget)
  • 3.1.3 Finished Goods Inventory – Value and in terms of Days of Sales at Cost (Actual vs. budget)

3.2 PURCHASE

3.2.1 Purchase Requests (PRs)

  • No. of PRs received
  • No. of PRs pending – Total and over one month

3.2.2 Purchase Orders (POs)

  • Normal POs – Number & Value
  • Rush Orders – Number & Value
  • Cash Purchase – Number & Value
  • Amendments – Number & Value

3.2.3 Savings

  • Difference between PR & PO value
  • Overtime hours (Actual vs. budget)

3.3 MATERIAL CONSUMPTION

  • Quantity scrapped (Actual vs. Budget/Target)

3.4 STORES

3.4.1 Receiving Section

  • Delay in preparation of GRN measured by % within 2 and 5 days
  • Delay in release of GRNs measured by % within 2, 5 and 10 days

3.4.2 Warehouse

  • Delay in collection of Finished Goods vs Stores Credit Notes (% within 2 & 5 days)
  • Delay in issue of materials vs MRs (% within 2 & 5 days)

3.4.3 Despatch Section

  • Delay in despatch measured by % within 1–5 days from delivery note receipt

3.4.4 Material Handling & Goods Traffic

  • Delay in collection measured by % within 1–5 days from collection advice

NOTE: All above parameters are compared with targets to measure efficiency.

3.4.5 Disposal Section

  • Value of Disposal Requests pending (monthly comparison)
  • Recovery against original value of disposal requests (trend analysis)

4. FINANCE MANAGEMENT

4.1 WORKING CAPITAL

  • Customer outstanding
  • Customer advances
  • Finished goods inventory (value & days of sales)
  • (Actual vs Budget)

4.2 ASSETS

  • Inventory Turnover Ratio
  • Fixed Assets Turnover Ratio
  • Total Assets Turnover Ratio
  • Sales per 100 sq. meters of space

5. MARKETING MANAGEMENT

5.1 MARKETING

  • Order-booking per person in Sales Departments
  • Order-booking sales and backlog (region-wise, Actual vs Budget)

ANNEXURE III – Extract from Statement of Policy

  • Commitment to manufacture high-quality, reliable products
  • Quality assurance program covers all engineering and manufacturing activities
  • Includes products like heat exchangers, reactors, pressure vessels, storage tanks
  • Full management support ensured
  • Manager – Quality & Inspection responsible for program
  • Escalation to Group General Manager in case of conflict

ANNEXURE IV – Vendor Information Form

General Details

  • Vendor Code
  • Date of Registration / Delisting
  • Introduced by / Visited by

Vendor Details

  • Name
  • Address (Office & Works)
  • Telephone / Telex
  • Contact Person

Business Details

  • Items Manufactured
  • Items for L&T
  • Type of Company:
    • Proprietary / Partnership / Pvt Ltd / Public Ltd

Registrations

  • Small Scale Industries
  • Directorate of Industries
  • Sales Tax
  • Income Tax

Financial Details

  • Capital Employed
  • Business with L&T (First Year)
  • Annual Sales (Last 3 years)

Bank Details

  • Name & Address of Bankers

Associates

  • Associate companies / manufacturing units

Production Facilities

Manpower

  • Managerial
  • Supervisory
  • Office Staff
  • Workmen
  • Avg Monthly Salary

Operations

  • Shifts: One / Two / Three
  • Floor Space: Covered / Uncovered

Equipment Facilities

  • Fabrication
  • Casting (Ferrous / Non-ferrous)
  • Forging
  • Sheet Metal
  • Machining
  • Grinding
  • Moulding (Plastic / Bakelite / Rubber / Carbon)
  • Heat Treatment
  • Electroplating
  • Others

Machinery Details Table

  • Description / Capacity / Make / Year / Nos / Remarks

Inspection Facilities

Gauges Available

  • Dial Vernier
  • Height Gauges
  • Slip Gauges
  • Depth Gauges
  • Bore Gauges
  • Snap Gauges
  • Plug Gauges
  • Ring Gauges

Testing Equipment Table

  • Description / Nos / Make / Capacity / Remarks

Licensing

  • Import License (Yes/No)
  • Raw Material Quota (Yes/No)

Approved Suppliers List

  • Name / Address / Since

Declaration

  • Information correctness declaration
  • Signature & Date
  • Name & Designation

Assessor’s Observations with Reference to Quality

  1. Quality Control Department exists (Yes/No)
  2. Reporting structure
  3. Inspection manpower (Trained/Untrained)
  4. Use of gauges/instruments (Yes/No)
  5. Owned or borrowed gauges
  6. Calibration system (Yes/No)
  7. Records maintained (Yes/No)
  8. SQC methods used (Yes/No)
    • Sampling plan
  9. Incoming inspection (Yes/No)
  10. Stage inspection (Yes/No)
  11. Final inspection before despatch (Yes/No)
  12. Storage precautions (Yes/No)

Vendor Evaluation

Attribute

Rating (A–D)

Quality Control Methods

Technical Competence

Managerial Competence

Financial Status

Housekeeping

Plant Maintenance

Safety

Layout

Material Handling

Storage Facilities

Additional Sections

  • Recommended Assistance to Vendor
  • Conclusion
  • Assessed by / Approved by

 

 

 

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