Role of Digitalization in the Growth of MSMEs in India: Opportunities and Challenges

Abstract

Digital technology has enormous potential benefits for the MSME sector in India. The business-focused digital environment has seen a substantial transition recently. A number of new elements have emerged that could help define the limits of a strong digital ecosystem. Problems arise when trying to address the complex and heterogeneous MSME sector, which is dominated by small businesses with varying degrees of digital readiness. An incentive for businesses to completely adopt digital technology would be to provide an ecosystem with end-to-end solutions for operations, management, payments, skilling, and even easy information sources. The global Covid-19 outbreak has forced businesses, including MSMEs, to digitally upgrade their operational procedures. This paper makes the argument that we should consider those factors that offer opportunities to deepen our understanding of MSMEs' attempts to digitise their operations. The government's policies on widespread social restrictions and physical segregation have a significant negative impact on MSMEs'operations. The development of business centres utilising the digital transformation paradigm may help MSMEs to go digital.