The DeepSeek moment

The Chinese AI firm DeepSeek has taken the technology world by storm with its cutting edge and low cost AI model. The Chinese model has been able to get results similar to American rivals ChatGPT, but at much much lower costs and with fewer chips.

India has the right resources, massive data centres and the ability to collect that data to be a pioneer in AI model creation.

DeepSeek development has taught us that such technology can be created without huge resources.

Bal Govind

Noida

Inflation pain

Apropos the article ‘Are household finances improving?’ (January 30), the author’s concerns on overall deterioration in Net Financial Savings are very much valid. In these days of galloping inflation, lower and middle class are forced to spend more on food items. There seems to be no respite from this menace and people are simply squeezed between their earnings and spending, negating the aspect of savings as the last priority.

The interest rate offered by banks on savings accounts is meagre. Interest rate deregulation has worsened the savings habit among the people. A few private banks do offer attractive interest rates on savings bank accounts but it comes with riders.

The Centre must combat inflation vigorously, which hurts the poor more. The only bright hope now lies on the General Budget which is around the corner.

RV Baskaran

Chennai

Support measures

This is with reference to “Budget can give a further push to MSMEs”, (Jan 30, 2025). India’s micro, small, and medium enterprise (MSME) sector, which serves as the backbone of the economy and contributes around 30-40% to the country’s gross domestic product (GDP), continues to face challenges in accessing easy and affordable credit necessary for their growth.

The MSMEs in the country currently face a credit gap of $530 billion, and only 14% of the 63 million small businesses in India have access to credit. This $530 billion financing gap underscores the seriousness of the issue, which experts attribute primarily to systemic challenges within India’s banking and financial systems. Traditional lenders, especially banks, demand substantial collateral, a requirement that most of the MSMEs, especially those in rural and underserved areas, are unable to meet.

Additionally, the absence of formal financial documentation or a robust credit history further limits access to affordable credit for many. This compels MSMEs to rely on informal sources, such as private moneylenders, who charge exorbitant interest rates, making loans a hard choice for small entrepreneurs. The Union Budget for 2025-2026 should provide support measures for the Micro, Small and Medium-scale Enterprises (MSMEs).

S.Muthulakshmi

Virudhunagar (TN)