have driven consequent cash transfers between hmt and the apf. between 2013 and end - september 2022, the apf transferred £124 billion to hmt under this arrangement, but it was always recognised that reverse payments from hmt to the apf were likely to be needed in the future as bank rate increased and the apf ’ s gilt holdings were eventually unwound. quarterly transfers from hmt to the apf have since taken place in the last three quarters. where the cash position ends up is uncertain and dependent on a whole range of factors including bank rate. [ 7 ] but importantly, the mpc does not take into account financial risk or profit when taking monetary policy decisions, including about the apf gilt portfolio. qt in principle – the mpc ’ s key qt principles are designed to keep it in the background to ensure a smooth unwind of the apf gilt portfolio, the mpc set out its approach to qt in the august 2021 mpr, [ 8 ] which was based on three key principles designed to reduce its impact and thus keep qt in the background ; first the committee had a preference to use bank rate as its active policy tool when adjusting the stance of monetary policy ; second sales would be conducted so as not to disrupt the functioning of financial markets ; and third to help achieve that, sales would be conducted in a relatively gradual and predictable manner over a period of time. key mpc principles for qt : use of bank rate as its active policy tool when adjusting the stance of monetary policy sales would be conducted so as not to disrupt the functioning of financial markets sales would b conducted in a relatively gradual and predictable manner over a period of time in line with the mpc ’ s first principle, the committee ’ s preference is to use bank rate as its active instrument in most circumstances primarily because there is greater certainty, built up over long experience, around how changes in bank rate affect the economy compared with its other policy tools. changes in bank rate can also be operationally easier and quicker to implement. although qt is designed to operate in the background, it has the important benefit of reducing the risk of a ratchet upwards in the size of the central bank balance sheet over time, if successive policy cycles meet the effective lower bound on interest rates. [ 9 ] that in turn should increase the headroom and flexibility for the central bank to be able to use its balance sheet in the future in pursuit of its

could be used for focusing on core activities. msmes, therefore, need to be updated on the latest technological developments. they should develop necessary skills to adopt new technologies, while at the same time they should be cognizant of the risks that lurk behind such opportunities and the need to manage such risks. skilled manpower and managerial talent human resource development issues are fundamental in improving sme competitiveness. empirical studies show that human capital is a significant determinant of growth. the ability of smes to adjust to the competitive pressures that come with trade liberalization and globalization will depend on the level of skills available domestically. in fact, there are instances where lenders have reckoned the management skills as an innovative form of collateral for loans. the government of india and various state governments have been implementing a number of schemes and programs over the years for skill development. the rural self employment training institutes ( rsetis ) are also working in this direction. the human capital issues for msmes include enhancing the managerial qualities of the msme promoters and building skilled workforce for enhanced productivity. several institutions such as national institute of micro, small and medium enterprises ( nimsme ) provide the training and capacity building support that is very crucial to msmes. however, given the growing requirements of the msme sector and the huge “ demographic capital ” we possess, significant efforts are still needed to enhance the skill and entrepreneurship development. my thoughts on this important area are : ( i ) in addition to the initiatives taken by government agencies, the industry, through a process of training and handholding, has to contribute to building up a large base of appropriately skilled workforce available for employment in msmes. ( ii ) there should be training programmes by the industry associations to upgrade the skills of the workers and to acquaint them with the skills compatible with the new technology and ( iii ) entrepreneurship training in school curricula should be incorporated to enable the young minds develop the orientation and mindset to become entrepreneurs later in their careers. as the cliche goes “ if you give a man a fish you feed him for a day. if you teach a man to fish you feed him for a lifetime ”. risk management and governance from a balance sheet perspective, risk is defined as the probability of actual cash flows falling below the projected cash flows. some estimate that 90 % of small business failures are caused by poor cash flows. anticipating the cash flow problems and developing the necessary coping skills to manage these shortfalls should be at the