What does the ₹100 crore tech upgrade in Telangana's new MSME policy signify?

The Telangana government is gearing up to unveil a groundbreaking policy for micro, small, and medium enterprises (MSMEs) on September 18. This highly anticipated launch is set to take place in the presence of the Chief Minister, Deputy Chief Minister, and Industries Minister, marking a significant milestone for the state's industrial landscape.

A standout feature of this policy is the establishment of a ₹100-crore fund aimed at facilitating technology upgrades for MSMEs in the defence and aerospace sectors. According to Industries and IT Secretary Jayesh Ranjan, Telangana will be the first state in India to provide such substantial financial assistance directly for technological advancements. This initiative is expected to significantly boost the capabilities of defence and aerospace MSMEs, setting Telangana apart from other states that offer incentives and concessions but not direct financial support for technology upgrades.

Ranjan highlighted the expected impact, noting that 60% to 70% of the policy's beneficiaries would likely come from the defence and allied sectors. This is a testament to Hyderabad's rich history in defence manufacturing, which has been a focal point of the region for over six decades. The state government is committed to building on this legacy through a multi-faceted strategy. This includes developing exclusive defence and aerospace parks, fostering a skilled workforce with initiatives like the Young India Skills Initiative, offering incentives for new projects, and promoting innovation in the defence sector.

In addition to state-level efforts, the central government is also contributing to this ecosystem by establishing a full-fledged iDEX (Innovations for Defence Excellence) in Hyderabad. This initiative aims to create a nurturing environment for innovation and technological development in defence and aerospace by engaging various stakeholders, including MSMEs and start-ups.

The need for an exclusive MSME policy in Telangana has been recognized for several months. It was even mentioned by then-Governor Tamilisai Soundararajan in a legislative address back in February. The policy is designed to address the unique challenges faced by MSMEs, which differ significantly from those encountered by larger industrial units. The goal is to enhance MSMEs' access to technology, skilled manpower, finance, and improved market access while preventing industrial sickness.

Industries Minister D. Sridhar Babu recently announced that the state government is also considering providing land on lease, rather than outright sale, to women entrepreneurs under the MSME policy. This move is expected to further support the growth and sustainability of MSMEs in Telangana.

According to the Invest Telangana website, the state is home to approximately 2.6 million MSMEs, with 56% located in rural areas and 44% in urban centers. Since the state's formation in 2014, nearly 20,000 registered MSME units have commenced operations with a combined investment of about ₹31,023 crore.

The unveiling of the MSME policy on September 18 represents a significant step forward for Telangana's industrial sector. The ₹100-crore tech upgradation fund, in particular, promises to transform the capabilities and competitiveness of defence and aerospace MSMEs, positioning Telangana as a leader in industrial innovation and growth.