Editorial 1 : Clear the bill
Introduction: Micro, small and medium enterprises are a key part of the Indian economy. Not only do they account for a significant share of the country’s manufacturing output and exports, they also employ a sizable section of the labour force.
Several hardships faced by MSMEs
- Among the considerable hardships they face, the lack of access to credit and the issue of delayed payments are particularly serious.
- Micro and small enterprises, as several studies have shown, account for a majority of the annual delayed payments.
The government’s initiatives to ease the credit flow to MSMEs
- Over the years, the government has taken steps to make matters easy for these enterprises.
- For instance, it launched the Samadhaan portal to monitor the outstanding dues to these enterprises.
- MSMEs can file online applications on the portal for delayed payments.
- They can check the status of their applications on the portal.
- The website will provide information about the pending payment of MSMEs with individual CPSEs/Central Ministries, State Governments, etc. The CEO of PSEs and the Secretary of the Ministries concerned will also be able to monitor the cases of delayed payment under their jurisdiction and issue necessary instructions to resolve the issues.
- In the Union budget 2023-24, the government also introduced a provision to ensure timely payments to MSMEs.
- The typical payment cycle of MSMEs ranges from 90 to 120 days.
- This large window tends to create mismatches between an entity’s cash inflows and outflows, thereby increasing its working capital requirements.
- The new provision tried to address this issue by aiming to secure payments to MSMEs within 45 days of the supply of goods and/or services.
- This was a well-intentioned move. However, it has ended up having unintended consequences.
What are the unintended consequences of reducing payment cycles to MSMEs?
- According to a report in Indian Express newspaper, larger companies are trying to circumvent this provision (timely payment to MSMEs) by cancelling orders to registered MSMEs as they prefer the longer payment cycles.
- In fact, they are now placing orders with unregistered MSMEs, who they would rather prefer to deal with as it gives them greater flexibility in operations.
- The new provision “allowed for deduction for larger companies” against payments to these enterprises “only after they are paid”.
- Not being permitted to “make deductions in their tax returns” would only increase their tax liability.
- There are also reports of the bigger companies trying to “force suppliers to cancel their MSME registration”.
- After all, the larger companies exercise considerable negotiating heft against their MSME suppliers.
- This asymmetry in relations has also resulted in a worrying development: MSMEs are choosing to deregister in order to make sure that they do not lose their orders.
- At the end of last year, the total number of MSMEs registered on the Udyam registration portal stood at 3.16 crore.
- This includes informal micro-enterprises registered on the Udyam Assist Platform, which according to more recent data stands at 1.5 crore.
Way Forward
- The government has initiated conversations with stakeholders for possible solutions to straighten out issues.
- It has also sought suggestions on ways to ensure “timely clearance of MSME bills”.
- Delayed payments have hobbled the working of these enterprises for long.
Conclusion: MSMEs have difficulty accessing low-cost credit. Appropriate steps must, therefore be taken to resolve the issue related to the window of payments at the earliest.
Editorial 2 : A confusing foundation
Introduction: Recently, the UGC chairperson announced that students with four-year undergraduate degrees can now appear for the National Eligibility Test (NET), an exam that certifies eligibility for lectureship in colleges and universities in India, and PhD programmes.
What will change after the announcement?
- Earlier, the eligibility for National Eligibility Test (NET) was a Masters’ degree.
- In other words, if one qualifies for the NET after a four-year undergraduate degree, one can now teach other undergraduate students.
- There is a question mark on who will recruit such graduates to teach undergraduate students.
The argument in favour of the change in policy
- The chairperson added that candidates could appear in a subject in which they want to pursue a PhD irrespective of the discipline in which they have obtained the four-year bachelor’s degree.
- According to him, “This step will help replace the need for separate entrance tests conducted by individual universities and Higher Education Institutions (HEIs).”
- It is, he added, the aim of the UGC to dismantle the perception of PhD as an “elite qualification”.
Not an ‘elitism’ issue
- A PhD or a doctorate in philosophy is a degree awarded after a candidate carries out rigorous original research for a period usually longer than two to three years.
- If a Master’s degree in any discipline is seen as a “specialisation”, a PhD reflects a research scholar’s ability to think creatively, ask new and insightful questions, explore them rigorously and systematically and, through this process, enable newer insights that challenge and advance existing theories and concepts.
- For this, a student would need to be conceptually and methodologically informed and able to use these skills for observation and analysis.
- This is not to say that a PhD programme should not itself aim to strengthen the conceptual and methodological tools of the research scholars, but there is a huge difference between strengthening and refining existing tools and aiming to introduce and instil them in a short period of one year.
- To further suggest that the hierarchies across degrees, from undergraduate, postgraduate and research levels are indicative of “eliteness”, is dangerous.
- To confuse a foundation attained through immersed and rigorous engagement with concepts with “eliteness” is a grave undermining of the academic process.
NET must maintain standards
- A rigorous conceptual and methodological preparedness at the undergraduate and postgraduate levels must be the aim.
- What we instead find is consistent dilution of this responsibility by first eliminating the MPhil programmes and now even the need for postgraduate degrees.
- It also appears to be a misinformed understanding of PhD-level research when one sees separate entrances as a hurdle, rather than as a useful modality to align the research interest of a student with a supervisor who is an expert in the given field, in an institution with the necessary resources to support the research.
Why four-year undergraduates are not apt to pursue a PhD?
- There exist inequities in our schooling systems which become more glaring with time.
- It takes considerable mentoring and work to help students transition from a system that requires confining oneself to textbooks, to reading original and more advanced works and writing analytically and reflectively.
- In the case of social sciences in particular, the development of questions that hold possibilities to advance an existing knowledge discourse requires active, critical and reflexive living and participation in social spaces.
- This, in turn, requires an entry into the various theoretical and conceptual frameworks that provide us with the vocabulary to talk about it.
- This is how theories on gender, caste, class, group processes, identities and many other aspects of the human world have evolved and transformed.
- The several critical researches that have managed to challenge the status quo would not have been possible without newer questions emerging from locations that were, till then, denied opportunities to ask and research.
- A related concern is also that if undergraduate degrees were to be sufficient for undertaking PhD research, it would actually lead to further “elitisation” of higher education as only those with existing linguistic and academic capital would be able to take the risk of pursuing a four-five year research programme in the absence of sufficient mentoring and preparation period.
Conclusion: What we need today are more publicly-funded research institutes with better infrastructure and more fellowships. This would be meaningful for individual students and the country, only if the requirements for rigour and the active provisions for sustained mentoring are not diluted.