Rs 1,700 Cr JICA Loan To Fuel Telangana’s MSME Growth

After evaluating what it would take for Telangana to improve its ranking, we identified six key problem areas: access to infrastructure, finance, skills, raw materials, technology, and market access. The government has proposed 40 implementable solutions, many of which do not require funding, while those that do have secured support from JICA, the RAMP programme, and the Women Entrepreneurship Platform - Jayesh Ranjan, Telangana’s Special Chief Secretary for Industries

Hyderabad: The Telangana government is gearing up to introduce additional measures to support the growth of Micro, Small, and Medium Enterprises (MSMEs) in the State. These initiatives are set to be launched in October, following the recent introduction of the MSME policy on September 18, 2024.

The government’s efforts are further bolstered by significant external support. The Japan International Cooperation Agency (JICA) has extended a Rs 1,700 crore loan to the State, earmarked for MSME development. Additionally, 14 projects have been sanctioned by the World Bank under Centre’s RAMP scheme, and the Telangana Chapter of the Women Entrepreneurship Platform has been established. These initiatives collectively aim to create a conducive environment for MSMEs to thrive in Telangana, contributing to the state’s economic growth and development.

At the seventh edition of the MSME Summit, themed ‘Transforming MSMEs – Strategies for Growth,’ organized by the Confederation of Indian Industry’s Telangana chapter, Jayesh Ranjan, Telangana’s Special Chief Secretary for Industries, said, “The performance of MSMEs is assessed and ranked based on specific parameters. Unfortunately, Telangana does not rank among the top five or ten in any of these areas, with Tamil Nadu, Gujarat, Maharashtra, Uttar Pradesh, and Karnataka leading the rankings. After evaluating what it would take for Telangana to improve its ranking, we identified six key problem areas: access to infrastructure, finance, skills, raw materials, technology, and market access. The government has proposed 40 implementable solutions, many of which do not require funding, while those that do have secured support from JICA, the RAMP programme, and the Women Entrepreneurship Platform.”

RAMP (Raising and Accelerating MSME Performance) is a Government of India initiative funded by World Bank and implemented across all States of the country. Telangana had sent its proposals to the Centre, which after scrutinising has sanctioned all the 14 proposals, many of which directly feed into the MSME policy, Jayesh Ranjan informed.

He went on to add that “97 per cent of enterprises are in the micro category due to the inability to invest in technology (modern machinery), lack of skilled people to operate it, and connect to source their products to high value large companies. The State’s position will elevate into the top five list if we get these enterprises to invest in modern machines/technology.”

The second initiative is a long-term loan secured from the Japanese government through its international funding agency, JICA. The agency has sanctioned Rs 1,700 crore loan, tenure starts from October 1, of which 20 per cent will be utilised for MSME projects and 80 per cent for startups. The Special Chief Secretary further said that it will support MSMEs on the lines of handholding, capacity building, skilling, awareness creation about MSME schemes and UDYAM registration.

Moreover, on October 1, Telangana chapter of WEP (Women Entrepreneurship Platform) will be launched. From the last seven years, WEP has been a National platform under Niti Aayog chapter, now they have kickstarted State chapters for women promoted enterprises in the formal and informal sector. Jayesh Ranjan highlighted that WEP has selected Telangana to initiate the first State Chapter, which will cover issues related to business plan, ease of doing business, market access, packaging, among others.

For implementation of all these MSME-focused programmes, Jayesh Ranjan said that he is designing an institutional mechanism. On October 4, the implementation mechanism will be ready, he informed, adding that it will be an autonomy body involving industry bodies, academic institution (NI-MSME) and MSME representatives.

The welcome address was delivered by D Sai Prasad, Chairman, CII Telangana. He raised the matter related to long-awaited government subsidy amount that the State has to disburse to the eligible MSME’s. In the concluding remarks, RS Reddy, Vice Chairman, CII Telangana urged the financial institutions to periodically hold ‘bankers meet’ with the MSME’s in the State to clarify matters related to financing and approval of loans.