India to push US on social security pact

18 Jan 2010,

NEW DELHI: In a move that could nip the current Indo-US bonhomie in the bud, the

Indian government is likely to link progress on the social

security agreement with the US to that of the Bilateral Investment Promotion Agreement
(BIPA). The ministry of overseas Indian affairs will be taking up the matter with the
ministry of external affairs.

The government has been pursuing the social security agreement, that will allow Indians
working under short-term contracts in the US to secure exemption from contributing to
the American social security system, since 2006 without much success.

Sources said, “The US has steadfastly turned a blind eye to the real need for finding a
solution to the complete loss of contribution for the large number of expatriate workers in
the US.” It is estimated that Indian expatriate workers are contributing about $1 billion to
the US exchequer annually as social security tax, including the employers contribution.

“After three years of negotiations we are still to arrive at an agreement,” a source said.
The problem, sources said, was not just the loss of revenue to the US but also the
country’s tax regime.

The US social security system mandates 40 quarters of contribution to earn any benefit
which is considered grossly inequitable as the visa regime that governs the residence and
work permit of non-immigrants in the US allows a person a maximum stay of six years in
case of H1B and seven years in case of L1 visas. Government sources said this was not in
line with the international practice in social security anywhere in the world.

Also under the US law, the employer and employee have to contribute 7.65% each (total
15.3%) of the salary of the worker. However, the workers are not able to avail any social
security benefit against this contribution because the US law prescribes a minimum
qualifying period of 10 years in order to be eligible for pension. Most countries have
resolved such problems through bilateral social security agreements that essentially avoid
double social security contribution on the same earnings.

India has signed agreements with Belgium, France, Germany and has finalised
negotiations with Netherlands, the Czech Republic, Luxembourg and Switzerland.
Social entrepreneurship in India

20 Feb 2009,

When Muhammad Yunus, 2006 Nobel Peace Prize awardee and founder of Grameen

Bank, was contacted by the Nobel Foundation for the customary winner
interview, he remarked, “...poverty is an artificial creation. It doesn’t belong to human
civilisation, and we can change that, we can make people come out of poverty (sic). The
only thing we have to do is to redesign our institutions and policies.”

That’s what social entrepreneurship is about: creating business models revolving around
low-cost products and services to resolve social inequities. And the realisation that social
progress and profit aren’t mutually exclusive has led to many social ventures taking root
in India as well.

Examples of successful social projects like Amul or SEWA were few and far between.
However, with the slowdown taking the shine off urban, higher-income target markets,
organisations focusing on ‘bottom of the pyramid’ audiences have become a reality. But
the days of easy funding are over. Given the employment squeeze, it would be natural for
aspiring social entrepreneurs to stick to their secure jobs instead. Surprisingly, they
continue to launch social enterprises with a vengeance.

In May 2008, 27-year old Rajnish Sinha and his IIM-Kozhikode batchmate Siva Cotipalli
started Bangalore-based DhanaX. A fascination with microfinance and the idea of
clubbing it with person to person (P2P) lending led them to quit their jobs to launch
DhanaX, a platform where people contribute small amounts online as loans. NGOs take
up the task of disbursing these loans to needy communities in their areas of operation.

Interest is charged at 24%, of which DhanaX keeps approximately 6%. This model has
worked in other countries as well. So far, DhanaX has helped its four partner NGOs
acquire loans of Rs 20 lakh. While yet to recover their initial investment of Rs 25 lakh,
Sinha is confident of success. “In future, we may partner with wealth management
companies or treasury departments of large corporations to keep the pipeline running,” he
says.

Richa Pandey, a marketing MBA, was a media sales professional in New Delhi for eight
years. But her calling was rural India, partly because of her roots—her grandfather was a
farmer in Uttar Pradesh. “The retail and BPO sectors were creating job opportunities in a
big way. I zeroed in on vocational training for rural youth in these areas,” Pandey recalls.

In October 2007, she approached the Rural Technology Business Incubator (RTBI) at
IIT-Madras with a business plan outline. “The RTBI platform helped add magnitude to
my plan,” Pandey says, adding, “Prof Ashok Jhunjhunwala assisted me in launching a
pilot programme in three districts of Tamil Nadu under the banner of eJeevika.” Around
the same time, she got a lucrative offer to head the marketing division of a large media
firm. Pandey turned it down and continued focusing on designing course content and
online training programmes in three areas: retail sales, data entry and security services.

eJeevika subjects candidates to psychometric tests to determine where they’d fit in best
and trains them accordingly. But Pandey’s chosen path hasn’t been easy. She currently
doesn’t take home a salary, preferring instead to plough everything back into the
business. In the past year, eJeevika trained 160 people, is on the verge of signing up four
BPOs as partners and is growing both in terms of scale and size, aiming to train 1,500
people by March-end. “If the slowdown has affected companies like ours, I’m yet to see
evidence of it,” she says, “Our team consists of eight highly-experienced people and we
still get enquiries from people who want to work with us.”

Experts like Kallol Borah, CEO, Headstart Foundation, feel that social-focus startups will
continue to thrive in India. “Bringing low-cost services such as banking, healthcare,
finance, etc. to underprivileged sections of society is definitely a big opportunity as well
as a necessity. Rural, small-town and lower-income consumers constitute a large market
waiting to be tapped, but it is necessary for social entrepreneurs to get past language,
literacy and geographical barriers.”

The current environment has also complicated the mix. Adrienne Villani, associate at
Intellectual Capital Advisory Services (Intellecap), is cautious, “No market is immune to
the global meltdown. I would think that people earning between 2-12 dollars a day will
indeed be affected.” If that is true, companies working for this block of the pyramid
would be affected as well. The answer may well lie in technology. Hi-tech social startups
are banking on ‘smart’ models to bring services to people at affordable costs.
Maruti Suzuki hikes social spending;
focuses on sustainability
28 Feb 2010,

NEW DELHI: The country's largest carmaker Maruti Suzuki India has increased its

investments on various social welfare schemes by over five per

cent during 2007-09 period, according to an internal report.

According to a sustainability report prepared by the firm, social expenditure was ramped
up to Rs 7.67 crore in FY'09 from Rs 7.3 crore in FY'08 and the company had initiated a
number of social projects despite economic slowdown in that period.

"Sustainability to us means being concerned about ensuring a win-win situation for all
our stakeholders at all points in time," Maruti Suzuki India (MSI) Chairman R C
Bhargava said while releasing the report.

The report highlighted the company's various measures to emphasise on saving energy
and resources by using environment friendly manufacturing technologies.

The company has also brought down its material cost to its total net sales to 79 per cent in
the last fiscal from 90 per cent in 2001-02, the report said.

Since 1999, MSI has been able to bring down its electricity consumption by 18 per cent
and water usage by 57 per cent, it added.

Besides, under the National Road Safety Mission, MSI has so far trained over 1.3 lakh
people across the country in safe driving since December 2008.

As part of MSI's CSR activities, four villages around the Manesar plant have been
adopted to ensure well-being of people living in these villages, MORE PTI TR RKL SSA
AMK 02281107 NNNN

MSI is also working towards increasing employability of the Scheduled Castes and
Scheduled Tribes sections of the society, the report said.
It pointed out that some other major CSR initiatives of the company include the Gujarat
Regional Automobile Training Institute, adoption of Industrial Training Institutes and
Maruti Schools for children.