CII DIGITAL SAKSHAM
The Micro and Small Enterprises (MSME) are the backbone of India’s economy and play a vital role in the socio-economic development of the country.
2020 brought the worst global crisis of the new millennium. COVID-19 left the world gasping, restructured the global economic order, impacted both supply and demand, and made the survival path for MSMEs unclear. This dynamic further exacerbated pre-existing macroeconomic challenges. COVID 19 has presented serious challenges to micro and small enterprises in India as well.
India has 63.38 million MSMEs, employing 111 million people. The Economic Census (EC) 2013, estimated that 72% were ‘own account enterprises’ that do not hire workers on a regular basis and operate with their own family labor. Of the total enterprises, EC 2013 estimated that nearly 36% were operated from household premises. The small scale of the operation of such micro-enterprises—own account and home based—makes them particularly vulnerable to an economic shock like the pandemic. According to the Centre for Monitoring Indian Economy (CMIE) report, an estimated 122 million people lost their jobs in April 2020 alone and three-quarters of these were small traders and wage laborers, mainly in the informal sector.
It is therefore important for micro and small enterprises to quickly recover from losses, cash flow issues, and labor-related challenges to not only survive and revive, but also compete in both domestic and international markets.
With much of commerce and services are now moving on-line, bridging the digital divide is required for the survival and growth of micro and small enterprises. Technology will play an important role in reviving MSMEs on the verge of shutting down or temporarily closing. Therefore, the right set of digital technology interventions, along with existing digital infrastructure of the country, can not only help MSMEs survive and revive, but also have large positive ripple effects on GDP growth and jobs. As we observe, there has been a paradigm shift in the role of technology from an enabler of productivity and process to a strategic competitive advantage and sustainable driver of growth. Today, MSMEs across the globe are focusing on adopting appropriate and innovative digital technologies to build their path to competitiveness, domestically and internationally. It is critical for Indian MSMEs to equip themselves with the latest technologies to keep up with global trends and competition.
The objective of Digital Saksham is to enable (Hindi=Saksham) MSMEs in India to understand the value of digital adoption, teach them about possible solutions and tools, and encourage their adoption or use. This will help MSMEs become financially prudent and resilient, build capacity, and further grow their businesses. Digital Saksham hopes to drive a number of outcomes for MSMEs, including but limited to: increasing their credit worthiness, improving fund flow, increasing market reach, reducing risks of cash handling, building awareness of and knowledge on the benefits of digital transactions, enabling access to digital lending, and entrenching digital governance best practices.