Joint Secretary in the Union Ministry of Micro, Small and Medium Enterprises (MSME) Ateesh Kumar Singh (centre) at an event organised by the PHDCCI. Photo: Special Arrangement.

Representative image
| Photo Credit: Getty Images/iStockphoto

New Delhi:

Artificial Intelligence, like any new technology, will destroy new jobs but also create new ones, Chairman of the 16th Finance Commission Dr Arvind Panagariya said during a fireside chat at the NDTV Emerging Business Conclave. He added that new technologies are known to raise productivity, reduce cost of production and expand economic activity.

Dr Panagariya said that in adopting new technologies, as tried by companies like Tesla and Adidas, the key factor is if automation will make the production process less costly. “Adidas opened automated facilities in Germany and the US, but had to move back to China,” he cited an example.

The economist said that Micro, Small and Medium Enterprises (MSME) remain a source of employment, but their growth is critical to ensure they remain productive in the race towards the 2047 Viksit Bharat goal.

Talng about skilling in MSMEs, Dr Panagariya said skill education helps, but the learning is always on the job. He added that capital is also needed to ensure skilling. “If the ecosystem they work in is large or medium, workers have to up their game. If the ecosystem is defined by less capital, there is no drive to acquire skills,” he said. He also said that part of the problem that plagues India’s MSME sector is the lack of medium enterprises.

Dr Panagariya said the success of MSMEs lies in ramping up production, which likely takes rural areas and turns them urban. “In Schengen, which started as a bunch of fishing villages is the most urbanised region on the Earth,” he said, crediting the power of industrialisation.

In a significant step towards making India self-reliant in supercomputing technology, Prime Minister Narendra Modi will today dedicate three indigenously developed PARAM Rudra supercomputers to the nation.

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The government has doubled the upper limit of loans under the Mudra scheme, Finance Minister Nirmala Sitharaman announced while presenting the Budget 2024 today. She also announced a new mechanism for facilitating continuation of bank credit to MSMEs during their stress period.

Micro, Small, and Medium Enterprises (MSMEs) will now be able to avail loans up to Rs 20 lakh instead of Rs 10 lakh under the Mudra scheme, which aims to bolster the start-up ecosystem in the country.

Pradhan Mantri Mudra Yojana was launched in 2015 to provide loans up to Rs 10 lakh to small and micro enterprises from commercial banks, small finance banks, and non-banking financial corporations.

The government has sanctioned Mudra loans worth Rs 5.4 lakh crore in the last financial year.

Small Industries Development Bank of India (SIDBI) will open new branches to serve more MSMEs over the next three years, said the Finance Minister. SIDBI aims to open 24 new branches in the current financial year.

Congress leader Jairam Ramesh. File
| Photo Credit: ANI

This year’s Union Budget will be judged by what it does to revive and rejuvenate India’s Micro, Small and Medium Enterprises (MSMEs), the Congress said on July 16.

In a statement, Congress general secretary Jairam Ramesh said that through a “combination of deliberate policy and wilful neglect”, the Narendra Modi-led government has systematically bludgeoned the MSME sector that accounts for 30% of India’s GDP, about 45% of its exports, and employs 12 crore people. Demonetisation, the “botched” implementation of GST, the COVID-19 lockdown, “rampant oligopolisation”, and cheap Chinese imports have all contributed to the near destruction of the sector, he said.

“Consequently, MSMEs are faced with high tax rates, severe credit crunch, high input prices, and widespread closures. Unsurprisingly, their contribution to GDP today is the lowest it has been in decades,” Mr. Ramesh said. 

GST 2.0 needed

The party’s wishlist of measures to revive the sector includes the extension of the non-performing assets (NPA) classification period for loans to MSMEs from 90 days to 180 days. The Congress called for GST 2.0 with a single, moderate rate, and relief for small taxpayers like MSMEs. The party also wants dedicated funds to create MSME export capacity, and enhanced funding for start-ups.

“The self-anointed non-biological Prime Minister and his government must revisit their economic agenda, shed their cronyism, and end their whimsical policymaking. This Budget will be judged by what it does to revive and rejuvenate India’s MSMEs,” Mr. Ramesh said.

Indian Institute of Technology- Madras in Chennai. File
| Photo Credit: VELANKANNI RAJ B

 The Indian Institute of Technology Madras has established a Centre for Tech Excellence to cater to the micro, small and medium enterprises with support from Walmart.

The centre aims to train MSME units in the use of artificial intelligence and internet of things technology quickly and effectively to develop their business. An agreement to this effect was signed on Wednesday. 

Institute Director V. Kamakoti said the MSMEs, which determine 30% of the Indian industry sector, required guidance to deploy technology. In the coming years, Indian companies would have to adhere strictly to Sustainable Development Goals for which the MSMEs must be equipped, he said.

The centre would use technology to help MSMEs with overall product evaluation, which in turn would improve economic growth, he said. “This is a kind of a venture that can be scaled to a 1.5 billion population whose needs are varied. There are varieties of MSME in fields such as agriculture and medicine (as well). We are introducing a common portal,” he said.

The Institute had started focusing on MSMEs since last year. It launched a centre with the financial company Kotak and many MSMEs had benefited. The institute’s study would be released as a report in a couple of months, Mr. Kamakoti added. “Similarly, we plan to empower and encourage MSMEs, through the tech centre,” he explained.

The centre would also offer solutions to many research problems as faculty from various disciplines and departments would be involved. 

Walmart’s chief technical officer and chief development officer Suresh Kumar, who is also an alumnus of the institute, said the company had been engaging with the institute since 2022. “First, we focused on students and research. This is the second collaboration between Walmart and IIT Madras,” he said.

In the next three years the Institute will take up 15-20 MSMEs who will be helped to leverage AI and IoT technology and form a case study for the institute.

In Telangana, there is a stark difference in socio-economic indicators between the districts around Hyderabad, the capital, and those far away from it. This is the fourth story in a series of Data Points exploring the inter-district differences in the southern States. The district-wise variations in Tamil Nadu, Kerala, and Karnataka were discussed earlier.

Given that the State of Telangana was formed barely a decade ago and the frequency of data across many indicators is poor, it is tough to provide time-series comparisons to show how the State has grown. But in general, Telangana was neither at the top nor at the bottom of the health, education and environment-related parameters analysed across States.

An analysis of district-wise data shows that development is limited to certain pockets of Telangana. 

Chart 1 | The chart shows the per capita income at current prices for 2020-21. 

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The top seven districts on this indicator (other than Hyderabad) were Rangareddy, Medchal-Malkajgiri, Medak, Mahabubnagar, Yadadri Bhuvanagiri, and Siddipet. Notably, all these districts are located next to Hyderabad or just one district away from it. However, peripheral districts such as Wanaparthy, Jogulamba Gadwal, Narayanpet, Kumuram Bheem Asifabad, and those that are far from the capital but not in the periphery, such as Mahabubabad, Jagtial, and Hanumakonda, featured at the bottom of the per capita income list. Vikarabad is an exception. It is relatively close to Hyderabad but has the lowest per capita income in Telangana.

Chart 2 | The chart shows the share of women aged 20-24 years who married as teenagers. 

While more than 35% of women married as teenagers in the peripheral districts of Khammam and Jogulamba Gadwal, about 10% of such women were in Hyderabad and Medchal-Malkajgiri.

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Chart 3 | The chart shows the share of children under five years who were underweight in 2019-21. 

Over 50% of children, the highest in the State, were underweight in Adilabad, the northernmost district. In contrast, Hyderabad and Medchal-Malkajgiri had 25% or less of underweight children.

Chart 4 | The chart shows the share of households with improved sanitation in 2019-21. 

Less than 65% of households had access to improved sanitation in the three peripheral districts in the north — Adilabad, Kumuram Bheem Asifabad, and Nirmal, which featured at the bottom of the list. In contrast, Hyderabad and two nearby districts — Siddipet and Medchal-Malkajgiri — were among the top five districts where more than 84% of the households had access.

Chart 5 | The chart shows the number of government hospital beds available per lakh population in a district as of 2020-21. 

Nirmal, Narayanpet, and Kumuram Bheem Asifabad featured among the bottom five, while Hyderabad, Rangareddy, and Mahabubnagar featured among the top five.

Chart 6 | The chart shows the number of people employed in factories per one lakh population as of 2018-19. 

Contract workers were not included. Among the top seven districts, except Nizamabad which leads other districts by a wide margin on this indicator, the rest were located around the capital district.

Chart 7 | The chart shows the number of employees working at MSMEs per one lakh population as of 2020-21. 

Among the top seven districts, except Karimnagar which leads other districts by a wide margin, and Suryapet, the rest were located around the capital district.

Chart 8 | The chart shows the Gross Enrolment Ratio at the high school level (2021-22). The top three districts were Rangareddy, Medchal-Malkajgiri, and Hyderabad.

vignesh.r@thehindu.co.in and rebecca.varghese@thehindu.co.in

Lathika V. is interning with The Hindu Data Team

Source: National Family Health Survey, Telengana State Statistical Abstract, and Telengana Socio-Economic Outlook 2023

Also read |Growth model of Telangana is an idea whose time has come: KTR

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