MBA Dissertation Report

1
DISSERTATION REPORT
On
Study on Adoption of Digital Technologies by
the Micro, Small and Medium businesses
Under
MGINNE Private Limited.
Submitted in Partial Fulfilment of the Requirements
for
The Master’s Degree in Business Administration
Submitted By: Under the Guidance of:
Shubham Bahuguna Shri S.K Dadar
M.B.A(SMS-530) Associate Professor
DOON UNIVERSITY, DEHRADUN
BATCH 2016-18

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ACKNOWLEDGEMENT
The dissertation opportunity I had with MGINNE Pvt. Ltd. was a great chance
for learning and professional development. Therefore, I consider myself as a very lucky
individual as I was provided with an opportunity to be a part of it. I am also grateful for having
a chance to meet so many wonderful people and professionals who led me though this period.
Bearing in mind previous I am using this opportunity to express my deepest gratitude
and special thanks to Mr. Sharbrndu Banerjee [Managing Director] , who in spite of being
extraordinarily busy with his duties, took time out to hear, guide and keep me on the correct
path and allowing me to carry out my project at their esteemed organization and extending
during the training.
I express my deepest thanks to Mr. Sanjay Mishra[officer], for taking part in useful
decision & giving necessary advice and guidance and arranged all facilities to make life easier.
I choose this moment to acknowledge his contribution gratefully.
It is my radiant sentiment to place on record my best regards, deepest sense of gratitude
to Dr. H.C. Purohit [Professor & Head of the Department], Shri. Shiv Kumar
Dadar[Associate Professor] for their careful and precious guidance which were extremely
valuable for my study both theoretically and practically.
I perceive as this opportunity as a big milestone in my career development. I will strive to use
gained skills and knowledge in the best possible way, and I will continue to work on their
improvement, in order to attain desired career objectives. Hope to continue cooperation with
all of you in the future.
Sincerely,
SHUBHAM BAHUGUNA
Place: Dehradun
Date: 12-05-2018

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DECLARATION
I, Shubham Bahuguna, student of MBA IVth
Semester, studying at Doon
University, Dehradun, hereby declare that the dissertation report on “Study on Adoption of
Digital Technologies by the Micro, Small and Medium businesses.” submitted to Doon
University, Dehradun in partial fulfillment of Degree of Master’s of Business Administration
is the original work conducted by me.
The information and data given in the report are authentic to the best of my knowledge.
This summer training report is not being submitted to any other University for award of any
other Degree, Diploma, and Fellowship.
SHUBHAM BAHUGUNA
Place: Dehradun
Date: 12-05-2018

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CERTIFICATE
I Have the Pleasure in Certifying That Mr. Shubham Bahuguna is a bonafide
Student of IVth
Semester of The Master’s Degree In Business Administration (Batch 2017-18),
of Doon University (Established By Government Of Uttarakhand), Dehradun.
He has completed his Project work entitled “Study on Adoption of Digital
Technologies by the Micro, Small and Medium businesses.” under my guidance.
I certify that this is his original effort and has not been copied from any other source.
This project has also not been submitted in any other institute/University for the Purpose of the
award of any Degree.
This project fulfils the requirement of the curriculum prescribed by this University for
the said course. I recommend this project work for evolution and consideration for the award
of the degree to the student.
Shri. S. K Dadar
Associate Professor
School of Management
Doon University, Dehradun

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EXECUTIVE SUMMERY
Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant
and dynamic sector of the Indian economy over the last five decades. MSMEs not only play
crucial role in providing large employment opportunities at comparatively lower capital cost
than large industries but also help in industrialization of rural & backward areas, thereby,
reducing regional imbalances, assuring more equitable distribution of national income and
wealth. MSMEs are complementary to large industries as ancillary units and this sector
contributes enormously to the socio-economic development of the country. The Sector
consisting of 36 million units, as of today, provides employment to over 80 million persons.
The Sector through more than 6,000 products contributes about 8% to GDP besides 45% to the
total manufacturing output and 40% to the exports from the country. The MSME sector has the
potential to spread industrial growth across the country and can be a major partner in the
process of inclusive growth.
The Digital India programme is a flagship programme of the Government of India with
a vision to transform India into a digitally empowered society and knowledge economy. The
journey of e-Governance initiatives in India took a broader dimension in mid 90s for wider
sectorial applications with emphasis on citizen-centric services. Later on, many States/UTs
started various e-Governance projects. Though these e-Governance projects were citizen-
centric, they could make lesser than the desired impact. Government of India launched National
e-Governance Plan (NeGP) in 2006. 31 Mission Mode Projects covering various domains were
initiated. Despite the successful implementation of many e-Governance projects across the
country, e- Governance as a whole has not been able to make the desired impact and fulfil all
its objectives. It has been felt that a lot more thrust is required to ensure e-Governance in the
country promote inclusive growth that covers electronic services, products, devices and job
opportunities. Moreover, electronic manufacturing in the country needs to be strengthened. In
order to transform the entire ecosystem of public services through the use of information
technology, the Government of India has launched the Digital India programme with the vision
to transform India into a digitally empowered society and knowledge economy.
The vision of Digital India programme is to transform India into a digitally empowered
society and knowledge economy.

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TABLE OF CONTENT
S.No Content Page No.
1. Front Page
Acknowledgement
Student’s Declaration
Certificate of completion
Executive summary
Table of Content
List of Figures
Acronyms
1
2
3
4
6
7-8
9
10
2. Chapter-1 Introduction
Introduction to topic
Objectives of The Study
Scope of The Study
10-20
11
18
18
3. Chapter -2 Digital India Overview
History
Important Milestones
9 Pillars of digital India
Government initiatives
Major Players
SWOT analysis
21-31
21
24
26
27
29
31
4. Chapter -3 Review of Literature 32-37
5. Chapter -4 Research Methodology
Objective of the Study
Types of Research and Research design
Sample Design, Sample Size, Sample Type
Data Collection Method
Limitations of The Study
38-43
39
41
42
43
43

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6. Chapter -5 Prospect of SME’s in India
Planning and Roadmap
Challenges
44-51
45
50
7. Chapter-6 MSME Investment and Employment
Investment
Employment
52-54
36
46
8. Chapter-7 Data Analysis and Interpretation
Questionnaire Analysis
Analysis
55-67
56
65
9. Chapter-8 Findings & Suggestions
Findings of the Research
Conclusion
68-72
69
72
10. Bibliography 74
11. Annexure
Annexure-1 Photographs Showing Digital Implementation
Annexure-2 Questionnaire
75-77
75
76-77

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LIST OF FIGURES
Figure. No Name of Figure Page No.
1. Make in India Programme 18
2. MSME India 19
3. 9 Pillars of digital India 19
4. Leading Industries: MSME 21
5. Important things in MSME 33
6. Prospects of SME’S in future 34
7. Digital India Programme 43
8. Upcoming market trends and information 46
9. Digital India: Mobile as a digital Identity 50
10. Data Analysis 58

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ACRONYMS
S.No. Acronyms Definition
1. B2B Business to Business
2. B2C Business to Customer
3. CAGR Compound Annual Growth Rate
4. CRM Customer Relationship Management
5. ERP Enterprise Resource Planning
6. FIR First Information Report
7. SWOT Strengths, Weaknesses, Opportunities, And Threats
8. FY Financial Year
9. GDP Gross Domestic Product
10. HSC Higher School Certificate
11. NeGP National e-Governance Plan
12. YoY Year on Year

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CHAPTER – 1
INTRODUCTION
Small and Medium Enterprises (SMEs), also known as small and medium scale
industries or businesses, are the essential part of a healthy economy. The SME sector represents
over 90 per cent of enterprises in most of the developing countries and contributes 40-60 per
cent of the total output or value added to the national economy. In recent years the MSE sector
has consistently registered higher growth rate compared to the overall industrial sector. The
major advantage of the sector is its employment potential at low cost. Worldwide the Micro,
Small and Medium enterprises have been accepted as the engine to economic growth and for
promoting equitable development. MSEs contribute over 90% of the total enterprises in most
of the economies and are credited with generating highest rate of employment growth and
account for a major share of industrial production and exports.
In India, the MSEs play a major role in the overall industrial development of the
country. It is estimated that in terms of value the small and medium enterprises account for
39% of the manufacturing out put and around 33% of the total export of the country. As per
the available statistics this sector employs an estimated 31 million people spread over12.8
million enterprises and the labor intensity in the sector is almost four times higher than the
large enterprises. In the Indian context, the small and medium enterprises (SME) sector is
broadly a term used for small scale industrial (SSI) units and medium-scale industrial units.
Any industrial unit with a total investment in its fixed assets or leased assets or hire-purchase

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asset of up to Rs 10 million, can be considered as an SSI unit and any investment of upto Rs
100 million can be termed as a medium unit. An SSI unit should neither be a subsidiary of any
other industrial unit nor be owned or controlled by any other industrial unit.
An SME is known by different ways across the world. In India, a standard definition surfaced
only in October 2, 2006, when the Ministry of Micro, Small and Medium Enterprises,
Government of India, imposed the Micro, Small and Medium enterprises Development
(MSMED) Act, 2006.
The president under notification dated 9th may, 2007 has amended the Government of
India (Allocation of Business) Rules, 1961 Pursuant to this amendment Ministry of Agro and
Rural Industries and Ministry of Small Scale Industries have been merged into a single
Ministry, Namely, “Ministry of Micro, Small and Medium Enterprises”.
As per the Micro, Small and Medium enterprises Development Act, 2006, in the
manufacturing sector an enterprise with investment in plant and machinery up to Rs. 5 crore
in termed as a small enterprise, and an enterprise with investment up to Rs.10 crore is defined
as a medium enterprise. In the services sector enterprises with investment in equipment up to
Rs, 2 crores are classified as small enterprises and those with investment up to Rs.5 crore are
classified as medium enterprise. Small and Medium Enterprises are a major contributor of the
GDP of a country and an even larger contributor to the segments of exports and employment.
The SME growth has been propelled by fresh investments in heavy and basic industries,
the contribution to exports and employment has been significant in the wake of increased
manufacturing activity and the increasing prominence of service sector companies in this

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space. The major thrust is on industries like garments, spices and metals, which are net revenue
earners for the country rich in its mineral reserves. The government of India has given small
enterprises an important place in the economic planning for ideological as well as economic
measures; As a result of these efforts the small sector has achieved an impressive growth in
the number of units. In infers, inter alia more chances for enterprising persons to assume the
entrepreneurial careers. Thus, SMEs serve as a seed-bed for the emergence of entrepreneurship
of the country. The development of small scale industries contribute to the increase in the per
capita income and contribute to the economic growth of the economy. It provides for more
equitable distribution of the income of the nation. Further they make effective mobilization of
the untapped capital and human skills and leads to dispersal of manufacturing activities all
over the country. Though the government of India is attaching increasing importance to the
development of small scale enterprises by way of various support measures adopted from time
to time, they are facing several problems in practice. According to the third census of
SSIs(2001-02) out of the 105 lakh registered and un registered SSIs over 95% are tiny units
with a low capital and managerial base. With intensifying competition many SMEs especially
in the consumer goods sector would find it difficult to survive.
Items reserved for SSIs will now face competition from similar products produced by
large scale global manufacturers, imported freely at low tariffs. When the domestic market is
fully open to global competition, the low labor cost advantage that our SMEs claim to enjoy
may not work beyond a point. Low end products will also face competition from export
oriented developing countries. This definition, however was changed according to the
changing economic scenario and thus has separate definitions to it. For instance, an SME
definition for manufacturing enterprises is different from what an SME definition for service
enterprises has to say.
Description of SME in the manufacturing sector:
The term enterprise in the manufacturing context stands for an industrial undertaking
or a business concern involved in the production, processing or preservation of goods for the
list of eligible industries in the First Schedule to the Industries (Development and Regulation
Act), 1951.
For the Manufacturing Sector, the MSMED Act 2006 defines micro, small and medium
enterprises (MSMEs) as mentioned below:
1. A micro enterprise is an enterprise where investment in plant and machinery does not
exceed Rs 25 lakh.

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2. The investment in plant and machinery in a small enterprise is more than Rs 25 lakh,
but does not exceed Rs 5 crore.
3. A medium enterprise is one where the investment in plant and machinery is more than
Rs 5 crore, but does not exceed Rs 10 crore.
In all these, the cost excludes that of land, building and the items specified by the
Ministry of Small Scale Industries with its notification No SO 1722 (E) dated October 5, 2006.
SME definition for Service Enterprises:
A service sector enterprise is defined as one involved in providing services. The
following points will explain how.
• Small road and water transport operators that can now own a fleet of vehicles not
exceeding ten in number.
• Small business, whose original cost price of equipment used for business, does not
exceed Rs 20 lakh.
• Professional and self-employed persons, whose borrowing limits do not exceed Rs 10
lakh of which not more than Rs 2 lakh should be for working capital requirements
• Professionally qualified medical practitioners setting up a practice in semi urban and
rural areas, whose borrowing limits should not be less than Rs 15 lakh with a sub-
ceiling of Rs 3 lakh for working capital requirements.
Definition of MSMEs for the Service sector is as follows:
• A micro enterprise is an enterprise where the investment in equipment does not go
beyond Rs 10 lakh.
• A small enterprise is an enterprise where the investment in requirement is not less than
Rs 10 lakh, but does not exceed Rs 2 crore.
• A medium enterprise, where the investment in equipment is not less than Rs 2 crore,
but does not exceed Rs 5 crore.
Definition of SME by MSMED Act, 2006
Investment ceiling for plant, machinery and equipment
Manufacturing Enterprise Service Enterprise
Micro Up to $62,500 Up to $25,000
Small $60,000 to $1.25 mn $25,000 to $0.5 mn
Medium $1.25 mn to $2.50 mn $0.5 mn to $1.25 mn

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Small and Medium Enterprises or SMEs are vital for the growth and well being of the
country. This sector was recognized and given importance right from independence and is
being encouraged ever since then. Though, it commenced on a small scale, it gradually gained
significance, because it employed a considerable number of people. When it started gaining
momentum, this sector was defined as an enterprise with investment in plant and machinery of
up to Rs 1 lakh and situated in towns and villages with strength of less than 50,000 people.
The policy statement put in place special legislation to recognize and protect self
employed people in cottage and home industries. District industries centers (DICs) were set up
and made the focal point of SSI development, bypassing large cities and state capitals. Also,
the government started providing special services akin to product standardization, quality
control and marketing surveys in order to assist the SSIs in enabling them to market their
products in an underdeveloped market. The scenario for the small-scale sector changed with
the Industrial Policy of July 1991, which, for the first time in India’s development history
spoke of liberalization. What this meant was that medium and large enterprises would no
longer need licenses to run. Export-oriented enterprises could be wholly foreign owned and
foreign equity participation was selectively allowed. Industries could import capital goods with
much fewer restrictions. 1996 saw the government involved in the setting up of a higher level
committee, known as the Abid Hussain Committee, to review policies for small industries and
recommend measures to help formulate a strong and innovative policy package for the rapid
development of SMEs. With liberalization, rapid changes were seen in the Indian economy.

17
Indian companies were no longer insulated from the global economy. In fact, there was
an urgent need to make them, especially SMEs, more competitive and resilient.
In 1991, the growth rate of SSIs was almost three times that of the total industrial sector at 3.1
percent. From 1991 to 1995, the growth rate of SSIs exceeded that of the total industrial sector.
Yet, in 1995-96, the growth rate of SSIs was slightly lower than the total industrial sector,
however it increased again in 1996 and continued to be higher than the total industrial growth
rate till 1999. Till 2006, the SME segment saw a lot more development and support from the
government.
Concerted efforts to support and promote SMEs in the context of a globalised competitive
world began with the implementation of the Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006. The MSMED Act 2006, which came into effect from
October 2, 2006 aims to remove several bottlenecks faced by the SME sector such as those
mentioned under: Competition from domestic companies and MNCs.
Inadequate access to finance due to lack of financial information and non-formal business
practices
• Lack of access to private equity and venture capital
• Lack of access to interstate and international markets
• Limited access to secondary market instruments
• Fragmented markets in respect of their inputs as well products.
• Vulnerability to market fluctuations
• Limited access to technology and product innovations
• Lack of awareness of global best practices
• Considerable delays in the settlement of dues/payment of bills by large-scale buyers.

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Objectives of The Study. -
Research Objective: Understand the diffusion level of digital technologies among micro,
small and medium businesses in both urban and semi-urban/rural India and the key factors
impeding digital transformation at grassroots level.
India is the world’s seventh-largest economy, sitting between France and Italy. India is
growing faster than any other large economy except for China. By 2050, India’s economy is
projected to be the world’s second largest, behind only China. World’s leading research firm
McKinsey has commented that the adoption of new technologies and innovative ideas across
sectors by the Digital India programme will help India boost its GDP by $550 billion to $1
trillion by 2025. However, there are still a few challenges to overcome; As a proportion of total
personal consumption expenditures, digital transactions in India were recently just 8%, well
below those of other emerging market countries such as Brazil (30%), South Africa (27%) and
Russia (16%)3 . As of 2014, 52,685 villages in India do not have any mobile coverage at all
and Internet usage in rural India has yet not reached double digit. Hence, it is important to
understand digitalisation of India from the bottom up perspective, especially the micro and
small entrepreneurs’ attitude towards adopting digital technologies, which is one of the
fundamental factors in making India Truly Digital.
Research Questions
2.1. To what extent MSME sector is using digital technologies
2.2. What are the digital technologies adopted by the MSME sector?
2.3. What are the business processes that has been digitised most?
2.4. What are the key impediments/pain-points in adoption of digital technologies by MSME
sector?
2.5. What is the overall perception of MSME sector about digitalisation policies of
government? (e.g. Adhaar, Digital India, Demonetisation etc.)
Scope of The Study. -
contributes enormously to the socio-economic development of the country.

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Geographical Condition of Research area-
Dehradun is the interim capital city of Uttarakhand, a state in the northern part of India.
Located in the Garhwal region, it lies 236 kilometers (147 mi) north of India's capital New
Delhi and 168 kilometers (104 mi) from Chandigarh. It is one of the "Counter Magnets" of the
National Capital Region (NCR) being developed as an alternative center of growth to help ease
the migration and population explosion in the Delhi metropolitan area and to establish a smart
city at Dehradun. During the days of British Raj, the official name of the town was Dehra.
Dehradun is in the Doon Valley on the foothills of the Himalayas nestled between the river
Ganges on the east and the river Yamuna on the west. The city is famous for its picturesque
landscape and slightly milder climate and provides a gateway to the surrounding region. It is
well connected and in proximity to Himalayan tourist destinations such as Mussoorie, and Auli
and the Hindu holy cities of Haridwar and Rishikesh along with the Himalayan pilgrimage
circuit of Chota Char Dham.
Dehradun Municipal Corporation is locally known as Nagar Nigam Dehradun. Other
urban entities involved in civic services and city governance and management include
Mussoorie Dehradun Development Authority (MDDA), Special Area Development Authority
(SADA), Jal Sansthan, and Jal Nigam among others. Dehradun is also known for its Basmati
rice and bakery products. The history of the city of Uttarakhand, Dehradun (nicknamed "Doon
Valley") is linked to the story of Ramayana and Mahabharata. It is believed that after the battle
between Ravana and Lord Rama, Lord Rama and his brother Lakshmana visited this site.
Dronacharya, the legendary Royal guru to the Kauravas and Pandavas in the epic Mahabharata,

20
is believed to have been born and resided in Dehradun.Evidence such as ancient temples and
idols have been found in the areas surrounding Dehradun which have been linked to the
mythology of Ramayana and Mahabharata.
Likewise, Rishikesh is mentioned in the pages of history when Lord Vishnu answered
the prayers of the saints, slaughtered the demons and handed the land to the saints. The
adjoining place called Chakrata has its historical impression during the time of Mahabharata.
In the seventh century, this area was known as Sudhanagara and was described by the Chinese
traveler Huen Tsang. Sudhanagara later came to be recognized as the name of Kalsi. Edicts of
Ashoka have been found in the region along the banks of river Yamuna in Kalsi indicating the
wealth and importance of the region in ancient India. In the neighboring region of Haripur,
ruins were discovered from the time of King Rasala which also reflect the region's prosperity.

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Chapter –2
DIGITAL INDIA OVERVIEW

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CHAPTER – 2
DIGITAL INDIA OVERVIEW
Digital India
Digital India is a campaign launched by the Government of India to ensure that Government
services are made available to citizens electronically by improved online infrastructure and by
increasing Internet connectivity or by making the country digitally empowered in the field of
technology. The initiative includes plans to connect rural areas with high-speed
internet networks. Digital India consists of three core components,
a) Development of secure and stable digital infrastructure,
b) Delivering government services digitally, and
c) Universal digital literacy.
Launched on 1 July 2015 by Prime Minister Narendra Modi, it is both enabler and
beneficiary of other key Government of India schemes, such as BharatNet, Make in
India, Startup India and Standup India, Industrial corridors, Bharatmala, Sagarmala, Dedicated
Freight Corridors and UDAN-RCS. The programme has been favored by multiple countries
including the US, Japan, South Korea, the UK, Canada, Australia, Malaysia, Singapore,
Uzbekistan and Vietnam.
At the launch ceremony of Digital India Week by Prime Minister Narendra Modi in
Delhi on 1 July 2015, top CEOs from India and abroad committed to invest ₹224.5 lakh

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crore (US$3.4 trillion) towards this initiative. The CEOs said the investments would be utilized
towards making smart phones and internet devices at an affordable price in India which would
help generate jobs in India as well as reduce the cost of importing them from abroad. Leaders
from Silicon Valley, San Jose, California expressed their support for Digital India
during PM Narendra Modi's visit in September 2015. Facebook's CEO, Mark Zuckerberg,
changed his profile picture in support of Digital India and started a chain on Facebook and
promised to work on WiFi Hotspots in rural area of India.[35] Google committed to provide
broadband connectivity on 500 railway stations in India. Microsoft agreed to provide
broadband connectivity to five hundred thousand villages in India and make India its cloud hub
through Indian data centres. Qualcomm announced an investment of US$150 million in Indian
startups.
Recent Milestone Achieved in Digital India Programme.
1. Microsoft CEO Satya Nadella has expressed his desire to support the Digital India
programme. He said that he was betting big on the fast-evolving economy and that
Microsoft would help bring low-cost broadband technology to five lakh villages across
India. "Digital India will bring about solutions for the challenge of the digital divide," he
had said.
2. Google has partnered with the Indian Railways to provide free wifi services at 100 major
railway stations. So far, Mumbai, Bhuwaneshwar, Ujjain, Jaipur, Patna among other cities
have been covered. RailTel, a PSU which owns a Pan-India optic fiber network exclusively
on the railway track, has laid out over 45,000 km of optic fiber networks across the country,
which Google will utilize for its Wi-Fi.
3. The Modi government also aims to provide mobile connectivity to 55,669 villages across
the country by 2018. The government has already laid optic cable fiber in 23,604-gram
panchayats till July 2015 in order to provide broadband connectivity. By the end of 2016,
the government claims that 2.5 lakh panchayats will be connected.
4. The Digital India initiative also boasts a new scheme, called the DigiLocker. The virtual
locker, a cloud-based platform where one can securely store digital files, is operated by
Department of Electronics & Information Technology (DeitY). So far, the DigiLocker has
fetched 18,98,358 registered users with 23,36,825 uploaded documents.
5. Digital India also includes the ambitious Smart Cities scheme, which will help to convert
100 cities across the country into smart cities. The government has allocated Rs 70.6 billion
(the US $1.2 billion) for Smart Cities in Budget 2014-15. A few smart cities are currently

24
in the development stage - including Kochi Smart City, Gujarat International Finance Tec-
City (GIFT) in Ahmedabad, Naya Raipur in Chhattisgarh, Lavasa in Maharashtra and Wave
Infratech's 4,500-acre smart city near New Delhi.
Nine pillars of Digital India
Broadband Highways
• This covers three sub components, namely Broadband for All Rural, Broadband for All Urban
and National Information Infrastructure.
• Under Broadband for All Rural, 250 thousand village Panchayats would be covered by
December, 2016. DoT will be the Nodal Department and the project cost is estimated to be
approximately Rs. 32,000 Cr.
• Under Broadband for All Urban, Virtual Network Operators would be leveraged for service
delivery and communication infrastructure in new urban development and buildings would be
mandated.
• National Information Infrastructure would integrate the networks like SWAN, NKN and
NOFN along with cloud enabled National and State Data Centres. It will also have provision
for horizontal connectivity to 100, 50, 20 and 5 government offices/ service outlets at state,
district, block and panchayat levels respectively. DeitY will be the nodal department and the
project cost is estimated to be around Rs 15,686 Cr for implementation in 2 years and
maintenance & support for 5 years.

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Universal Access to Mobile Connectivity
• The initiative is to focus on network penetration and fill the gaps in connectivity in the country.
• All together 42,300 uncovered villages will be covered for providing universal mobile
connectivity in the country.
• DoT will be the nodal department and project cost will be around Rs 16,000 Cr during FY
2014-18.
Public Internet Access Programme
• The two sub components of Public Internet Access Programme are Common Service Centres
and Post Offices as multi-service centres.
• Common Service Centres would be strengthened and its number would be increased from
approximately 135,000 operational at present to 250,000 i.e. one CSC in each Gram Panchayat.
CSCs would be made viable, multi-functional end-points for delivery of government and
business services. DeitY would be the nodal department to implement the scheme.
• A total of 150,000 Post Offices are proposed to be converted into multi service centres.
Department of Posts would be the nodal department to implement this scheme.

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e-Governance: Reforming Government through Technology
Government Business Process Re-engineering using IT to improve transactions is the most
critical for transformation across government and therefore needs to be implemented by all
ministries/ departments.
The guiding principles for reforming government through technology are:
• Form simplification and field reduction – Forms should be made simple and user friendly and
only minimum and necessary information should be collected.
• Online applications, tracking of their status and interface between departments should be
provided.
• Use of online repositories e.g. school certificates, voter ID cards, etc. should be mandated so
that citizens are not required to submit these documents in physical form.
• Integration of services and platforms, e.g. UIDAI, Payment Gateway, Mobile Platform,
Electronic Data Interchange (EDI) etc. should be mandated to facilitate integrated and
interoperable service delivery to citizens and businesses.
Ø Electronic Databases – all databases and information should be electronic and not
manual.
Ø Workflow Automation Inside Government – The workflow inside government
departments and agencies should be automated to enable efficient government
processes and also to allow visibility of these processes to the citizens.
Ø Public Grievance Redressal - IT should be used to automate, respond and analyze
data to identify and resolve persistent problems. These would be largely process
improvements.
e-Kranti - Electronic Delivery of Services
There are 31 Mission Mode Projects under different stages of e-governance project lifecycle.
Further, 10 new MMPs have been added to e-Kranti by the Apex Committee on National e-
Governance Plan (NeGP) headed by the Cabinet Secretary in its meeting held on 18th March
2014.
Technology for Education – e-Education
• All Schools will be connected with broadband. Free wifi will be provided in all secondary and
higher secondary schools (coverage would be around 250,000 schools). A programme on

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digital literacy would be taken up at the national level. MOOCs –Massive Online Open Courses
shall be developed and leveraged for e-Education.
Technology for Health – e-Healthcare
• E-Healthcare would cover online medical consultation, online medical records, online
medicine supply, pan-India exchange for patient information. Pilots shall be undertaken in
2015 and full coverage would be provided in 3 years.
Technology for Farmers
• This would facilitate farmers to get real time price information, online ordering of inputs and
online cash, loan and relief payment with mobile banking.
Technology for Security
• Mobile based emergency services and disaster related services would be provided to citizens
on real time basis so as to take precautionary measures well in time and minimize loss of lives
and properties.
Technology for Financial Inclusion
• Financial Inclusion shall be strengthened using Mobile Banking, Micro-ATM program and
CSCs/ Post Offices.
Technology for Justice
• Interoperable Criminal Justice System shall be strengthened by leveraging e-Courts, e-Police,
e-Jails and e-Prosecution.
Technology for Planning
• National GIS Mission Mode Project would be implemented to facilitate GIS based decision
making for project planning, conceptualization, design and development.
Technology for Cyber Security
• National Cyber Security Co-ordination Centre would be set up to ensure safe and secure cyber-
space within the country.
Information for All
• Open Data platform and online hosting of information & documents would facilitate open and
easy access to information for citizens.
• Government shall pro-actively engage through social media and web based platforms to inform
citizens. MyGov.in has already been launched as a medium to exchange ideas/ suggestions
with Government. It will facilitate 2-way communication between citizens and government.

28
• Online messaging to citizens on special occasions/programs would be facilitated through
emails and SMSes.
• The above would largely utilise existing infrastructure and would need limited additional
resources.
Electronics Manufacturing
Target NET ZERO Imports is a striking demonstration of intent.
This ambitious goal requires coordinated action on many fronts
• Taxation, incentives
• Economies of scale, eliminate cost disadvantages
• Focus areas – Big Ticket Items FABS, Fab-less design, Set top boxes, VSATs, Mobiles,
Consumer & Medical Electronics, Smart Energy meters, Smart cards, micro-ATMs
• Incubators, clusters
• Skill development
• Government procurement
There are many ongoing programs which will be fine-tuned. Existing structures are inadequate
to handle this goal and need strengthening.
IT for Jobs
• 1 Cr students from smaller towns & villages will be trained for IT sector jobs over 5 years.
DeitY would be the nodal department for this scheme.
• BPOs would be set up in every north-eastern state to facilitate ICT enabled growth in these
states. DeitY would be the nodal department for this scheme.
• 3 lakh service delivery agents would be trained as part of skill development to run viable
businesses delivering IT services. DeitY would be the nodal department for this scheme.
• 5 lakh rural workforces would be trained by the Telecom Service Providers (TSPs) to cater to
their own needs. Department of Telecom (DoT) would be the nodal department for this scheme.
Early Harvest Programmes
IT Platform for Messages
• A Mass Messaging Application has been developed by DeitY that will cover elected
representatives and all Government employees. 1.36 Cr mobiles and 22 Lakh emails are part
of the database.

29
Government Greetings to be e-Greetings
• Basket of e-Greetings templates have been made available. Crowd sourcing of e-Greetings
through MyGov platform has been ensured. E-Greetings portal has been made live on
14th August 2014.
Biometric attendance
• It will cover all Central Govt. Offices in Delhi and is already operational in DeitY and has been
initiated in the Department of Urban Development. On-boarding has also started in other
departments.
Wi-Fi in All Universities
• All universities on the National Knowledge Network (NKN) shall be covered under this
scheme. Ministry of HRD is the nodal ministry for implementing this scheme.
Secure Email within Government
• Email would be the primary mode of communication.
• Phase-I upgradation for 10 lakh employees has been completed. In Phase II, infrastructure
would be further upgraded to cover 50 lakh employees by March 2015 at a cost of Rs 98 Cr.
DeitY is the nodal department for this scheme.
Standardize Government Email Design
• Standardised templates for Government email are under preparation and would be ready by
October 2014. This would be implemented by DeitY.
Public Wi-fi hotspots
• Cities with population of over 1 million and tourist centres would be provided with public wi-
fi hotspots to promote digital cities. The scheme would be implemented by DoT and MoUD.
School Books to be eBooks
• All books shall be converted into eBooks. Min. of HRD/ DeitY would be the nodal agencies
for this scheme.
SMS based weather information, disaster alerts
• SMS based weather information and disaster alerts would be provided. DeitY’s Mobile Seva
Platform is already ready and available for this purpose. MoES (IMD) / MHA (NDMA) would
be the nodal organizations for implementing this scheme.
National Portal for Lost & Found children
• This would facilitate real time information gathering and sharing on the lost and found children
and would go a long way to check crime and improve timely response.
• DeitY/ DoWCD would be the nodal departments for this project.

30
Strength, Weaknesses and Challenges
MSME units in India are being funded by foreign and local fund providers. The
advancement in technology has also contributed highly to the MSME sector. There are
numerous business directories and trade portals available online that contains a rich database
of manufacturers, sellers and buyers to start and maintain these units, minimal investment is
required. These MSME units are now being funded by many government and private banks.
The MSME sector is one of the greatest contributors of domestic production as well as the
export earnings· Many major mergers have taken place recently.
Strengths:
• The MSME sector is often driven by individual creativity.
• It’s potential for greater innovation both in terms of products and processes.
• Enterprises can be set up with very small amounts of investments.
• Location flexibility to be located anywhere in the country.
• There is a well-spread network at the national, state and the local level for providing
a comprehensive range of support services under marketing, technology, finance, and
infrastructure and skill development.
• Maximum potential for employment generation.
Weakness:
• Small and Medium Enterprises (MSME), have inadequate access to finance due to lack
of financial information and non-formal business practices.
• MSME’s also lack access to private equity and venture capital and have a very limited
access to secondary market instruments.
• MSME’s face fragmented markets in respect of their inputs as well as products are also
vulnerable to market fluctuations.
• MSME’s lack easy access to inter-state and international markets. There is lack
of awareness of global best practices.
• The access of MSME’s to technology and product innovations is also limited.
Challenges Faced by the MSME Sector
• The challenges being faced by the small and medium scale sector may be briefly set
out as follows-Small and Medium

31
• Enterprises (MSME), particularly the tiny segment of the small enterprises has
inadequate access to finance due to lack of financial information and non-formal
business practices.
• MSME’s also lack access to private equity and venture capital and have a very limited
access to secondary market instruments.
• MSME's have to face the increased cost of raw materials.
• MSME’s face fragmented markets in respect of their inputs as well as products and are
vulnerable to market fluctuations.
• MSME’s lack easy access to inter-state and international markets.
• There is lack of awareness of global best practices.
• The access of MSME’s to technology and product innovations is also limited.
• In the competitive market, MSMEs need protection against market manipulation and
need to be given institutional support.
• MSME’s face considerable delays in the settlement of dues/payment of bills by the
large scale buyers.
With the deregulation of the financial sector, the ability of the banks to service the
credit requirements of the MSME sector depends on the underlying transaction costs, efficient
recovery processes and available security. There is an immediate need for the banking sector
to focus on credit and finance requirements of MSME’s. There is need of high level research
and development required to develop these sectors in both the urban and rural areas. The
MSME units are functioning efficiently and effectively, but even now there is lack
of information regarding the inputs of these industries, like the raw materials, skills, machinery
and equipment. Though the MSME industries are spread all over the urban areas, proper
infrastructure needs to be developed in the rural areas to establish these industries there.

32
Chapter –3
REVIEW OF LITERATURE

33
CHAPTER – 3
REVIEW OF LITERATURE
Tanuja R. Patil, Shamshuddin K., Rajashekhar Patil, Sadanand P. Proposed the idea that
a farmer’s club should be formed in each village and each village information is linked together
through networking. This idea is originated by an NGO called Rajaganga Farmers Foundation.
An NGO should function as a facilitator between farmer’s club and Govt. Farmers club will
work to collect information from the farmers and get any sort of help through NGO. This is
based on the concept “Farmers are for Farmers”. The authors are carrying out this idea in four
phases. These phases are:
1) Database creation: A detailed survey of each farmer has to be carried out, which include
the information regarding the land details, crop details ,the type of crops he was
growing before and what crop he is planning for next Karif or Rabi season. This helps
in crop yield analysis.
2) Website development for precision agriculture information: Precision Agriculture is the
application of technologies and principles to manage all aspects of agriculture for
improving production.
3) Android App development: An Android application for this project is developed to
facilitate farmers to get agriculture information in their hands.
4) Farmer specific SMS creation: The farmers who have limited or no internet connection
and who does not have smart phones can still receive precision agriculture information
on mobile phone as a SMS.
Jinal Jani and Girish Tere represents the idea where Digital India campaign is a welcome
step in shaping an India of the 21st century powered by connectivity and the technological
opportunity that such connectivity offers in terms of access, services. Digital India has three
essence components. These include: 1) Digital infrastructure creation, 2) Digitally Delivering
services and resources and 3) Digital Education. The authors have developed a program that
targets to make different government services available to people digitally and enjoy the benefit
of the newest information and technological 6innovations. The consumers will be benefited by
the way of saving time, money, physical and cognitive energy spent in lengthy government
processes. This paper also focuses on the universal availability of the digital services in
different Indian languages.

34
Sudhir Kumar Sharma, Vandana Lama and Nidhi Goyal proposed the objective to have a
vision on the Digital India campaign where technologies and connectivity will come together
to make an impact on all aspects of governance and improve the quality of life of citizens. This
initiative will ensure that all government services and information are available anywhere,
anytime, on any device that are user friendly and secured. The authors aim at providing
a) Digital infrastructure as a utility to every citizen i.e. to deliver high speed
communication technologies
b) Governance and Services on Demand i.e. every government services or information is
available online and on mobile platforms with a single touch and
c) Digital Empowerment of Citizens i.e. every citizen will empower through digital
literacy and universal access to digital resources.
Suman Rani through this paper has discussed about the various Government services provided
by the Government of India for the people living in the rural areas of the nation. This paper
also focuses on the nine pillars of Digital India, economic, environmental and social impact of
Digital India. The author has also discussed about the challenges brewing because
establishment of Digital India.
Jain (1990) in his article entitled “Assistance of Small Industry”, has pointed out that the
institutional assistance to small business would be to set up the right type of institutions and
provide infrastructure facilities to small enterprises. There is a need for a liberal and
sympathetic attitude in administrating the policies of the government.
Venkateswara Rao (1995) in his article entitled “Development of SSI”, states that the survey
conducted by the RBI and the National State Insurance Corporation (NSIC) also established
that the small units use capital more efficiently and the profitability of the small-scale sector is
higher than that of large-scale sector. He also stresses that the role of banks to nurture the
Small-Scale Industries by going beyond just providing finance.
Nirmal K gupta (1995) in his article entitled “Small Industry”, states that a large number of
central government organization have been stabled in the country to provide organizational,
technical, financial, marketing, raw material, training and other forms of assistance required
by the small scale cottage and village industries. More importantly, Industrial Development
Bank of India (IDBI), National Bank for Agriculture and Rural Development (NABARD) and
Small Industrial Development of India (SIDBI) are among them etc. These organizations found

35
to have been playing very significant role in the development of small scale and cottage
industries in particular through financial assistance and consultancy services.
Sarosh Bana (2000) in his article entitled “India’s Small Scale Sector”, states that, according
to the Small Industries Development Bank of India (SIDBI) SSI accounts for as much as 96
per cent of India’s industrial units, 40 per cent of the output in the manufacturing sector and 35
per cent of the exporters apart from employing over 17 million people. Importantly, this sector
has also spurred a new generation of entrepreneurs and opened up new lines of production
besides providing vital ancillary inputs for the organized sector. He also points out that SIDBI
believes that their service for MSMEs go much beyond than just lending money.
Basheer Ahmed (2000) in his article entitled “Sickness of SSI”, states that one of the functions
of DIC (District Industrial Centre) is to help the entrepreneurs in providing greater financial
assistance to SSI units. In providing financial assistance to the units, DICs are supported to
liaise with public sector banks and other government department and agencies. It is found that
a few members approached the DIC to get financial assistance.
Sridhar Krishna (2001) in his article entitled “Impact of Small Scale Industries”, states one
of the main functions of the DIC is to give provisional and permanent registration to industrial
units not only as legal requirements but also for keeping structural development which enables
the entrepreneurs to avail themselves of the various incentives, concession and other benefits
from public sector banks related to the development of SSI.
Sundar et al. (2001) in their article entitled “The Role of Small Industries Development Bank
of India (SIDBI) in Financing Small Scale Industries”, states that, the role of Small Industries
Development Bank of India (SIDBI) in providing financial assistance is generally
commendable both in terms of number of schemes sanctioned and the quantum of loans
disbursed over a period of eight years. The bank is mainly financing to small-scale industries
through “refinance” and “bills financing” schemes.
Latest Updates on MSME Budget (2018-19)
Commenting that MSMEs are "major engine of growth and employment generation"
while presenting Budget 2018, Finance Minister Arun Jaitley announced Rs 3794 crore
allocation to MSME sector for credit support, capital and interest subsidy on innovation.
The Finance Minster also asserted that demonetization and the introduction of GST is enabling
the government to make policies which will benefit the micro and small medium enterprises.

36
"Mass formalization of the business of MSMEs is happening after demonetization and
introduction of GST. This is generating enormous amount of financial information database of
MSMEs which will be used for improving the finances of MSMEs and other requirements
including working capital," said Jaitley in the Lok Sabha while presenting the government's
budget outlay for 2018-19. The FM also promised to revamp the online loan sanctioning
facilities for MSMEs to enable prompt decision making by banks.
According to the Economic Survey 2017-18, data on credit disbursed by banks shows
that out of a total outstanding credit of Rs 26,041 billion as in November 2017, 82.6% of the
amount was lent to large enterprises and MSMEs got only 17.4 % of total credit. Extension of
credit has been low for the SME sector in the country despite lower level of NPA. The
Economic Survey revealed sector-wise NPAs of banks from till March 2017 indicating that
MSMEs had 11.8% (Rs 658 billion) share in total NPAs by PSBs in the priority sector, and
13.1% (Rs 757 billion) in 2016. It also revealed that MSMEs had 9.6% share of NPAs in the
priority sector for PVBs in 2016 and 8.7% in 2017. With this backdrop, FM promised that the
"government will soon announce measures to effectively address NPAs and stressed accounts
for MSMEs." "This will enable a larger financing of MSMEs and considerably ease cash flow
challenges faced by MSMEs," FM added. Commenting on the impact of MUDRA scheme
launched in April 2015, FM said that the scheme has led to sanction of Rs 4.6 lakh crore in
credit; out of which 76% accounts belong to women and more than 50% to SC, ST and OBCs.
Strategies Proposed For MSME’s
When we observe the general imbroglios associated with these segments of industries the
following strategies can be proposed:
Niche Market Strategy:
Launching a product into a niche market is far cheaper than launching a mass-market product.
Potential customers are easier to identify and to target. Niche markets often develop as a subset
of mass markets and mass marketed manufacturers choose to launch niche products as well.
So in the context of creating awareness about their product and also create a better platform to
sale their products, niche market strategy would be an appropriate plan.
Financial Strategy (Creating Snapshot of Cost, Margin, Operating Capital):
All small businesses need to have absolute certainty and clarity about their fixed costs and their
variable costs into the near-to medium term future and have mechanisms in place to review
this on a regular basis. Cash flow management is a basic and essential business requirement. If

37
they need to borrow money as an overdraft or a factoring arrangement or even off friends and
family, it should be ensured that they are getting the best terms and the maximum flexibility
possible. They need to be allowed about eight weeks to arrange credit and plan accordingly.
Negotiations with the financial institution must include the flexibility to get out of the
arrangements as their cash reserves improve. It should be decided priory whether they are going
to pay individual commissions, team bonuses and special privileges. Are the special deals you
are offering to employees sustainable in the longer term? All these factors must be considered.
Establishing an Information Mapping Strategy:
After going through the gamut of issues regarding SMSE s it has been found that there is a
lack of proper information flow among various departments particularly the workflow so a
cross function application such as ERP could be implemented which would act as a storehouse
of information and help the managers to take efficient decisions in future.
Process Strategy:
There are indeed many options open to the SME regarding executing change. This could be
started from standardizing the primary functions of the organization like as mentioned below:
• Finance (billing, invoicing)
• HR (staff information, retention, training, incentives)
• Operations (planning, scheduling, information sharing, inventory, forecasting)
• Delivery & logistics (fulfilment, customer deliveries)
Supply chain (information sharing, access to production planning data, inventory
replenishment, order tracking, forecasting)

38
Chapter –4
RESEARCH
METHODOLOGY

39
CHAPTER – 4
RESEARCH METHODOLOGY
4.1.- Research. -
Research in common parlance refers to a search for knowledge. Once can also define
research as a scientific and systematic search for pertinent information on a specific topic. In
fact, research is an art of scientific investigation. A careful investigation or inquiry specially
through search for new facts in any branch of knowledge. 1 Redman and Mory define research
as a “systematized effort to gain new knowledge.”2 Some people consider research as a
movement, a movement from the known to the unknown. It is actually a voyage of discovery.
This inquisitiveness is the mother of all knowledge and the method, which man employs for
obtaining the knowledge of whatever the unknown, can be termed as research. Research is an
academic activity and as such the term should be used in a technical sense. The systematic
approach concerning generalization and the formulation of a theory is also research.
Research is the systematic design, collection, analysis and reporting of data and
findings relevant to a specific situation or problem. The objective of this section is to describe
the research procedure and methods that have been adopted for the achievement of the project
objectives. The purpose of research is to discover answers to questions through the application
of scientific procedures. The main aim of research is to find out the truth which is hidden and
which has not been discovered as yet.
4.2.- Objectives of The Study. -
The Digital India programme is a flagship programme of the Government of India with
a vision to transform India into a digitally empowered society and knowledge economy. The
journey of e Governance initiatives in India took a broader dimension in mid 90s for wider
sectorial applications with emphasis on citizen-centric services. Later on, many States/UTs
started various e-Governance projects. Though these e-Governance projects were citizen-
centric, they could make lesser than the desired impact. Government of India launched National
e-Governance Plan (NeGP) in 2006. 31 Mission Mode Projects covering various domains were
initiated. Despite the successful implementation of many e-Governance projects across the
country, e- Governance as a whole has not been able to make the desired impact and fulfil all
its objectives. It has been felt that a lot more thrust is required to ensure e-Governance in the
country promote inclusive growth that covers electronic services, products, devices and job

40
opportunities. Moreover, electronic manufacturing in the country needs to be strengthened. In
order to transform the entire ecosystem of public services through the use of information
technology, the Government of India has launched the Digital India programme with the vision
to transform India into a digitally empowered society and knowledge economy.
4.3.- Scope of The Study. -
contributes enormously to the socio-economic development of the country. The Sector
consisting of 36 million units, as of today, provides employment to over 80 million persons.
The Sector through more than 6,000 products contributes about 8% to GDP besides 45% to the
total manufacturing output and 40% to the exports from the country. The MSME sector has the
potential to spread industrial growth across the country and can be a major partner in the
process of inclusive growth.
4.4.- Research Design
Research design specifies the methods and procedures for conducting a particular study. A
research design is the arrangement of conditions for collection and analysis of the data in a
manner that aims to combine relevance to their search purpose with economy in procedure.
Research design is broadly classified into three types as:
Ø Exploratory Research Design
Ø Descriptive Research Design
Ø Causal Research Design
Descriptive Research Design
Descriptive research studies are those studies which are concerned with described the
characteristics of particular individual. In descriptive as well as in diagnostic studies, the
researcher must be able to define clearly, what he wants to measure and must find adequate
methods for measuring it along with a clear cut definition of population he want to study. Since
the aim is to obtain complete and accurate information in the said studies, the procedure to be

41
used must be carefully planned. The research design must make enough provision for
protection against bias and must maximize reliability, with due concern for the economical
completion of the research study. Descriptive Research method attempts to determine the
extent of differences in the needs, perceptions, attitude and characteristics of subgroups.
Sampling Design-
Sample Design is a definite plan for obtaining a sample from a given population. It
refers to the technique to the procedure adopted in selecting items for the sampling designs
are as below:
SAMPLE SIZE
The sample size has been 15 Employees. Conclusions had been arrived at using the response
of the questionnaire.
SAMPLING METHOD
In this research project, I am using Random sampling method.
Data Collection-
Method of Data collection:
Ø The study proposed to collect Primary Data through questionnaire using survey
method. So as to give a precise, accurate, realistic and relevant data.
Ø The Secondary Data as it has always been important for the completion of any report
provides a reliable, suitable, equate and specific knowledge. The data will collect from
websites published by the company.
Understand the diffusion level of digital technologies among small and medium
businesses in urban India and the key factors impeding digital transformation at
grassroots level. A case study of Dehradun Uttarakhand.
Descriptive Research:
This research focuses on primary and secondary data. The primary data which is in the form of
Questionnaire which is formal structured and clearly defined. The data analysis is quantitative.
Findings will help in knowing the importance, trends and trades of the vocational internships
trainings.

42
Research Questions:
1. To what extent MSME sector is using digital technologies
2. What are the digital technologies adopted by the MSME sector
3. What are the key impediments/pain-points in adoption of digital technologies by
MSME sector
Sampling Design:
The questionnaire was constructed for the survey. It consist set of questions which was
presented to owners or managers of the enterprise for their answers.
Population and Sampling Technique:
People constitute from MSME’s of Dehradun for the population of the study. 51 MSME were
randomly chosen for the study. Sample size was selected using the simple random sampling
technique. A Sample size of 51 was considered sufficient in view of the time and resource
constraint.
Data Collection Procedure:
Ø Type of data: Primary and Secondary Data
Ø Methods of collecting primary data: e-questionnaire
Ø Methods for filling questionnaire: Android Application
Instruments used:
The instruments that we have used for the survey are:
Ø e-questionnaire
Ø Android Application.
Data Analysis:
Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the
goal of highlighting useful information, suggesting conclusions, and supporting decision
making. Data analysis has multiple facets and approaches, encompassing diverse techniques
under a variety of names, in different business, science, and social science domains.
Analysis Tools:
Ø Simple percentage and average
Ø Bar graphs, Pie charts, doughnuts charts and area charts

43
4.5.- Limitations of The Study. -
Although all effort was taken to make the result of the survey as accurate as possible,
there were certain constraints during the study.
1. Research is based on the sample size of 51 People which may not be representative of
the population.
2. There may be a possibility of biasness on the part of some respond, but very much care
has been taken to make this report unbiased. Some of the respondents may not have
given the answers with their full enthusiasm.
3. Some managers might not give the correct information due to their lack of interest and
shortage of time.
4. Time constraint- Time limit restricts detailed survey work for this particular topic of
research.
5. All the information, which is taken, is based on primary and secondary data that has its
own limitations.

44
Chapter –5
PROSPECTS OF SME’ IN
INDIA

45
CHAPTER – 5
PROSPECTS OF SME’ IN INDIA
As per the survey conducted by Neilson group, Indian SMEs are pretty positive about their
future growth prospects. Nearly, 79 percent of SMEs surveyed were looking forward to
positive growth this year. Around 30 percent of SMEs expect moderate growth, while 43
percent expect phenomenal growth in the future. In terms of cross-border trade, 73 percent are
looking forward to trade with China.Even from the global perspective Indian SMEs are doing
pretty well. According to UPS ABM 2008 survey, almost 41 percent of offshore SMEs
respondents have rated Indian SMEs more aggressive and competitive than them. According
to Dun & Bradstreet’s Emerging SMEs of India 2008, in India there are certain sectors
invariably dominated by SMEs and these SMEs have been contributing significantly to the
economy. Auto components, chemicals, petrochemicals, engineering goods, food and agro
products, gems and jewellery, IT and IT enabled services, leather and leather products,
pharmaceutical, plastic goods and textiles are some of the prominent sectors, principally
dominated by the SMEs.
Boosting industrial growth
By enhancing existing capacities, and by delivering cost-efficient goods and services as per
the requirements of the local markets, SMEs have been driving industrial growth.
Inspiring Consumption and Social Change.
SMEs play a defining role by offering reasonable, yet revolutionary goods and services to cater
to the changing market requirements. Currently, SMEs have made its presence felt in areas like
education, medical care, transportation, entertainment and local infrastructure development.

46
Opportunities for SMEs
`The size of the SMEs fortunately works in its favor. The biggest plus; they can manage
most of the processes in-house, in comparison to larger companies where majority of the work
gets outsourced. As a result of this, SMEs have greater control and demand shorter production
time. In addition, since SMEs operate in rural areas, cheap labor is also available in plenty.
Meanwhile, SMEs can profit from India’s growing economy and especially focus on India’s
domestic market. In fact, recent studies reveal that Asian companies should better concentrate
on catering to the local demand, though exports, of late, form their top priority.
Currently, India’s population stands at 1.1 billion and is increasing at a rate of 1.3
percent a year. And incidentally, almost 350 million Indians are reported to have disposable
income. Unarguably, India’s per capita income is low; however, it has more than doubled in
the past years. India’s current per capita disposable income stands at around US$556 per
annum, which will be inch up to $1,150 by 2015. Plus, the opening of SMEs to foreign direct
investment is going to benefit the SME players in a significant way.
Apparel and textile
Indian textile sector is highly fragmented. Government’s focus on increasing employment
opportunities, and at the same time curbing capacity and mechanization; and reserving
products for small-scale industries have contributed to the rise of large scale SMEs in this
sector. In 2005, all items were removed from reservation. Today, the industry clocks an annual
growth rate between 9 and 10 percent and has generated employment opportunities for 35
million people and another 56 million indirectly.

47
SIGNIFICANCE OF SMES
SMEs are considered the engine of economic growth in both developed and developing
countries as they:
§ Provides low cost employment since the unit cost of persons employed is lower for SMEs
than for large sized units.
§ Assists in regional and local development since SMEs accelerate rural industrialization
by linking it with more organized urban sector.
§ Help achieve fair and equitable distribution of wealth by regional dispersion of economic
activities.
§ Contribute significantly to export revenues because of the low cost labour intensive
nature of its products.
§ Have a positive effect on the trade balance since SMEs generally use indigenous raw
materials, reducing dependence on imported machinery, raw material or labour.
§ Assist in fostering self-help and entrepreneurial culture by bringing together skills and
capital through various lending and skill enhancement schemes.
§ Impart the resilience to withstand economic upheavals and maintain a reasonable growth
rate since being indigenous is the key to sustainability and self-sufficiency.
§ Firms with sales less than $1 million spend 2x - 3x more on R&D per $ of sales than the
average. And result is SMEs’ producing 55 percent more innovations than LSEs’.1
§ Converts the raw material within the country into semi-finished items and later pass it on
the LSEs that have capital, skill and equipment to process these into finished goods.
§ Provide rural people an opportunity for income generation and personal growth since
they can work at home. This helps to achieve fair and equitable distribution of wealth by
creating nationwide non-discriminatory job opportunities.
§ Attracts direct foreign investment since multinationals and big conglomerates have
started to outsource from countries with strong SME sectors. The low labour cost makes
production of semi finished goods very economical for large concerns operating in
international markets.
§ The SMEs act as engines through which the growth objectives of developing countries
can be achieved.

48
ADVANTAGES OF SMES
The advantages of SMEs in an economy be it labor intensive or otherwise are manifold.
Therefore, the development of small and medium industries in any country has specific effects
on the balanced and dynamic growth of a country. It has a number of advantages over large
scale industries. Some of these are mentioned below:
§ It generates more jobs per unit of capital and is more capital efficient.
§ Similarly it is also strongly integrated into the domestic economy.
§ Small industries use a high percentage of local raw materials. Most of local consumable
products are produced by small scale industries. It taps the resources at the grass root
levels.
§ The promotion of Small and medium industries induces rapid growth of large scale
manufacturing in the long run.
§ It also generates cheaper goods and services to the general population which attempts
to break the cycle of the ever increasing price hikes. The increased employment and
the goods/services produced has a positive effect on the GNP of a country. This
becomes a catalyst in breaking the poverty cycle.
§ The small businesses are remarkably flexible because they operate near the customer,
thus it has the ability to adapt according to the ever changing needs of the customer.
PROSPECTS OF SMALL MEDIUM SCALE INDUSTRIES IN INDIA:
1. Road map for the development of micro development unit in the 11th plan. The limit
set for investment in the micro units is a major hindrance in this era of Globalization
and competitiveness. The limit has been increased to 5 crores. Steps for development
of MSE in the eleventh plan are as follows. It has been targeted to raise the production
of MSE units to 13,98,803 cores for the year 2011-12. Employment has been planned
to be increased from 322.28-391.73 lakhs.
2. In the MSE scheme in the eleventh plan, previously the manifesto was good for all
which has been turned to development. Regarding this, the document (VOL III p. 203)
it has been informed that "The eleventh plan approach to the MSE sector marks shift
from welfare approach to that of empowerment. The plan looks at the sector as an
engine for sustained and inclusive economic growth and employment. The eleventh
plan emphasizes on the improvement of living standard of workers and believes that
only if a worker is physically and mentally sound, then will he be able to produce a
good output.

49
3. In the eleventh plan, as the MSE sector is unorganized, the plan aims at organizing it
so that MSE sector gets maximum benefit of all the govt. schemes and plans.
4. In the eleventh plan, MSE groups have been taken as a cluster and workers have been
made into a group (SHGS) so that their bargaining power is increased
5. The MSE sector gets a loan of 5 lakh for 8 % interest without any Bailee will be
encouraged a vehement drive will be undertaken, to develop this sector.
6. Centre and the state govt. will give prime importance to the MSE sector. Women
working in this sector, get their due rights, for that efforts will be made.
7. Technical information will be provided to Small Industries Development Organization
now known as Micro, Small and Medium Enterprises Development Organization
which has around 3000 technicians who work in testing centers, tool rooms, etc.
8. Ministry of MSME has been formed for the development of Micro, Small and Medium
Industries. In the eleventh plan, it has been decided to establish Technology mission,
which will help develop dissemination of technology.
9. In the year 2006, the govt. started the National Manufacturing Competitiveness
Programmed. Under it in 5 years, at the cost of 850 crores, design clinics, steps to
increase the competitiveness of groups, and decrease the wastage will be undertaken
10. This sector faces basic problems like that of electricity. In the eleventh plan it has been
suggested, that these small and micro units establish their own power plants.
11. Owing to the industrial laws and disputes act, the worries of this sector have increased.
According to the planning commission, it has been advised to form a third party which
will investigate into the matter.
CHALLENGES OF SMALL AND MEDIUM SCALE ENTERPRISES IN INDIA:
In the current economic slowdown SME sector has been hit very hard due to r
aisinginterest rates and financial crunch.The small size and capacity of the firms and
their lack of awareness have bred many hindrances to their growth such as Under-
utilization of capacity, Inadequate and untimely credit flows, Inability in technology up
gradation, Insufficient raw-material procurement Inability to market finished goods and
Ineffective monitoring and feedback mechanism. The problem which continues to be a big
hurdle for the development of the sector is the lack of access to timely and adequate credit.
Increasing competition and globalization, along with the need to produce quality
products at best prices, have prompted the industry to introduce new product development
methods with modern technology. The need to evolve technologically superior methods of

50
product development holds true, especially for players in the SME segment. The small and
medium enterprise sector is widely regarded as the engine of the Indian economy. Small and
medium enterprises (SME) contribute to the industrial, economic, technological and regional
development in all developed and developing countries. The Indian SME market is valued at
$5 million. The 11 million SME units, which make up the Indian SME sector. Produce over
8000 products. These constitute 95 % of all industrial units and contribute 40% to industrial
output. The SME sector also plays a significant role in the development of entrepreneurial
skills and forms a substantial portion of the country’s export earnings.
The contribution of SME’s in the industrial development of the country has been
remarkable. At the state level, the government has played the major role in ensuring growth by
establishing various institutes to support this sector. Which include small industry
Development Corporations (SIDC) and several Centers for Entrepreneurship Development
(CEDs). There are many institutes that currently support SMEs at the national level. These
include the National Research Development Corporation (NRDC) and the Bureau of Indian
Standards (BIS). However, since the early 1990’s Indian SMEs have been exposed to intense
Competition due to increasing globalization, This has made survival and growth of this sector
difficult.
INFRASTRUCTURE DEVELOPMENT
The quality of the infrastructure affects the growth prospects of SMEs to a great extent,
especially in a developing country like India. Here, 77% of the population lives in villages.
Many rural areas still suffer due to the deplorable state of basic infrastructure like transport,
telecommunications and electricity. The integration of rural industries with mainstream
industries is proving to be difficult for these reasons. This has been identified as a key deterrent
to the growth of SME clusters in rural areas.
TECHNOLOGICALLY HANDICAPPED
Technology plays a crucial role in the development of SMEs. Technology not only
helps in evolving a multipronged strategy but also in maximizing business opportunities for
these enterprises. Technologies for SMEs should aim at fuelling innovation and business
agility. They should be easy to integrate with existing systems and processes, and help in
leveraging communicate and information management. Today, most SMEs in rural areas
undertake manufacturing using old methods and outdated technology. But today, the
competition is fierce, unlike in the past, when buyers were simply looked forward to
purchasing the best products at the lowest prices. There are additional challenges to be met.

51
The influx of low-cost products from china has made it even more difficult for Indian
manufacturers to compete solely on the price front. China is considered the world’s
manufacturing backyard, due to its low manufacturing and labour costs when compared to
those in India.
UPCOMING MARKET TRENDS AND INFORMATION
One of the factors limiting the growth of SMEs is the lack of adequate information.
Once SMEs start the business, they may be interested in knowing about the suppliers of specific
machinery that suit their needs, technical information and market trends for their products.
This information is rarely available at the grassroots level.
NEW PRODUCT DEVELOPMENT
The SME market requires a strong new product development base. In India, most SMEs
work on the designs given to them by domestic or foreign buyers. There is very little innovation
in product design development, and even the technology used by the SMEs in India is
Outdated. This has direct implication on the profit margins, and a dip in productivity levels.
The use of traditional tools, old techniques, poor labour productivity, they have not been used
to a large extent, resulting in no substantial effect on the output.
THE WAY AHEAD
There e is a strong need to find ways to manage modern technology and labour market
constraints, which impede the productivity of SMEs. Policy-makers and research institutions
have repeatedly pointed out to the need for extensive research on the SME sector. What these
SMEs need today is knowledge and access to new technology, adequate financial aid, high
levels of R&D and adaptability to the changing trends in their respective industries. With the
increasing competition, globalization and the uncertainty due to the global downturn, SMEs
will have to continuously incorporate the latest technology into their production processes as
well as in their marketing and management functions, to cut costs, gain efficiency and
consistency. This will help them become successful, and contribute to the Indian economy in
the long run. Overall, the small industry sector has performed well, and has enabled the country
to achieve considerable industrial growth and diversification.

52
Chapter –6
MSME INVESTMENT AND
EMPLOYMENT

53
CHAPTER – 6
MSME INVESTMENT AND
EMPLOYMENT

54
Government Data of MSME Investment and Employment in Uttarakhand (2017-2018)-
Total: 353, Investment (In Lakh): 2901, Employment: 1402
Micro: 312, Investment (In Lakh): 1254, Employment: 1069
Small: 41, Investment (In Lakh): 1647, Employment: 333
Medium: 0, Investment (In Lakh): 0, Employment: 0
Manufacture Sector: 81, Investment (In Lakh): 604, Employment: 358
Service Sector: 272, Investment (In Lakh): 2297, Employment: 1044

55
Chapter-6
DATA ANALYSIS AND
INTERPRETATION

56
CHAPTER-6
DATA ANALYSIS AND
INTERPRETATION
1. Demographic Data and its Interpretation
i. Gender of respondents
Interpretation:
• Out of 51 respondents only 8 were female which comprises of 16% of the population.
These respondents were either owner of the business or work as an employee.
• Male domination can be seen with 84% of the population.
• Age of these respondents, were from 26 to 71, with an average of 38 years and all of
them were residents of Dehradun, Utttarakhand.
• All these respondents were in the business from a few months to a maximum of 37
years, with an average of 16.68 years.
84%
16%
Gender of respondents
Male
Female

57
ii. Industry Vertical of the business.
Interpretation:
• The industry vertical of the business under taken for the study of this report are
represented above.
• There are 26 industries that fall under the trading vertical which take a major of 51%
(approx.) of the total SME under the study. After that there are 17 industries which are
from service vertical and make a 33% (approx.) of total.
• Manufacturing vertical has 6 industries, where as agriculture and other verticals
comprises of 1 industry each, this make a combined of 16% (approx.) of the total.
• This implies that my study will be biased or directed as per the responses of trading
vertical industries.
TR A D IN G S E R V IC EMA N U FA C TU R IN GA G R IC U LTU R E O TH E R
26
17
6
1 1
INDUSTRY VERTICAL
Number of Respondents

58
sQuestion 1: To what extent SME sector is using digital technologies?
i. Percent of business is digitized.
Interpretation:
• Most of the respondents weren’t using digital technologies more than 20%; every function
of the business process is either operated physically or through smart phone. 20 respondents
out of total were digitalized up to 20% only that make 39% of the total population under
study.
• Only 7 respondents were digitalized between 20%-40%, 11 respondents were using digital
technology between 40%-60%.
• A total of 13 respondents were using digital technology from 60% to 100% that makes 25%
(approx.) of the total.
0
2
4
6
8
10
12
14
16
18
20
0%-20% 20%-40% 40%-60% 60%-80% 80%-100%
Percentage Usage of Digital Technologies
Number of respondents

59
ii. Digital Equipment’s used by the businesses
Interpretation:
• All of the respondents except one uses smart phone for their business operations. Apart
from smart phones, desktop computer and internet modem each were used by 25
respondents which make 50% (approx.) of the population.
• 33 Respondents use one or other kind of power back up system which is noted under UPS.
People uses other digital technologies like CCTV cameras, biometrics looks etc., for their
businesses there were a total of 28 respondents who were using these digital equipment’s,
it adds up to 55% (approx.) of the total population.
• Other equipment’s like laptop computer, plotter machine and printers were used by 11, 02,
13 respondents respectively. There were not even a single respondent who uses scanner for
his/her business operations under this study.
0
5
10
15
20
25
30
35
40
45
50
Digital Equipments used by the businesses

60
iii. Social Media pages for your business
Interpretation:
• As most of the respondents uses only smart phone for their business, which explains the
above explanation where 45 respondents use WhatsApp for their business operations which
make 88% (approx.) of the population.
• Few of the respondents’ uses or have a business presence on Facebook for the various
business operations though it’s only 30% (approx.) of the population.
• Other social media website fails to encourage people to make a page on their website for
the different operation a business may perform. There were 0 respondents for twitter, linked
in and YouTube.
• Only three respondents use some other social media to operate their business processes.
15
0 0
45
0
3
0
5
10
15
20
25
30
35
40
45
50
Facebook Twitter Linkedin Whatsapp YouTube Other
Social Media pages for your business

61
iv. Accepting online banking payment in business operations
Interpretation:
• 51% of the respondents accept online banking payments while 49% either don’t trust the
online processes or don’t have appropriate knowledge.
v. Accepting UPI/BHIM App Payment for business operations
Interpretation:
• Only 4% of the respondents accept UPI/BHIM app payments while 96% either don’t trust
the UPI/BHIM or don’t have appropriate knowledge.
51%49%
Accepting online banking
payment
Yes
No
4%
96%
Accepting UPI/BHIM App
Payment
Yes
No

62
vi. Accepting credit card payment for business operations
Interpretation:
• 57% of the respondents accept credit card payments while 43% don’t trust the processes or
don’t have appropriate knowledge or felt the machines used for same are costly.
vii. Accepting mobile wallet (e.g. PayTM) payment for your business
operations
Interpretation:
• 60% of the respondents accept mobile wallet payments and that to specific to payTM, while
40% don’t trust the processes or don’t have appropriate knowledge.
57%
43%
Accepting credit card payment
Yes
No
60%
40%
Accepting mobile wallet (e.g. PayTM)
payment
Yes
No

63
viii. Usage of email and scanned documents for business communication
Interpretation:
• Only 4% of the respondents use email and scanned documents for business communication
while 96% either don’t have appropriate knowledge or don’t like to use it.
ix. Accepting orders/enquiries through messaging (e.g. SMS/WhatsApp)
Interpretation:
• Only 2% of the respondents’ do not use accept orders/enquiries through messaging while
98% accept orders/enquiries through messaging.
4%
96%
Usage of email and scanned
documents
Yes
No
98%
2%
Accepting orders/enquiries through
messaging
Yes
No

64
x. Paying more than 80% of vendors through bank
Interpretation:
• 69% of the respondents pay more than 80% of vendors through bank and that to specific to
payTM, while 31% make payments in cash to the venders.
xi. Paying more than 80% of employee salary through bank
Interpretation:
• Only 16% of the respondents’ pay more than 80% of their employee salary through bank
while 84% of them pay their employees in cash.
69%
31%
Paying more than 80% of vendors through
bank
Yes
No
16%
84%
Paying more than 80% of
employee salary through bank
Yes
No

65
xii. Awareness of the objectives of Digital India Mission of Government of
India
Interpretation:
• Only 22% of the respondents’ are aware of the objectives of Digital India Mission of
Government of India which are 11 in numbers whereas 78% of the respondents’ do not
have information about this mission by GOI.
22%
78%
Awareness of the objectives of
Digital India Mission of Government
of India
Yes
No

66
Research Question 2: What are the digital technologies adopted by the MSME sector?
i. Which of the following digital technologies you are currently using
Interpretation:
• The most adopted digital technology by the respondents was SMS/ voice message
marketing, by 50 respondents which makes a 98% of the total, this high percentage is
because it is easy to understand, implement and pocket friendly compared to other, and
almost everyone posses the knowledge of using same.
• Apart from SMS marketing demonetization does boost the use of digital finance, especially
payTM. Still only 29 respondents uses digital finance and they too prefer cash or card
payment first, as people don’t trust these digital wallets. Rest of the respondents either don’t
have the knowledge of operating these wallets or don’t find these safe enough.
• Some of respondents use accounting software as it reduces the effort of billing and it’s easy
to keep an eye on in-out flow of money, 45% of the respondents this software.
• Other digital technologies like website, mobile app, inventory software and customer care
are used by only 1 or 2 respondents.
0
10
20
30
40
50
60
Technologies currently in use
Number of respondents

67
Research Question 3: What are the key impediments/pain-points in the adoption of
digital technologies by MSME sector?
i. Challenges faced while implementing digital technologies in business.
Interpretation:
• Lack of knowledge about digital technologies is the challenge faced by most of the
respondents, which are 26 in number. 21 respondents faced challenges during the
implementation because of lack of skill training on digital technologies.
• Lack of developers/vendors who can develop solutions is also was a big challenge for
14 of the respondents while only 7 of the respondents felt the implementation was a
costly investment.
• 7 respondents weren’t interested in implementing digital technologies for their business
operations.
0
5
10
15
20
25
30
Number of
respondents

68
SPSS Analysis. -
Cronbach’s alpha is a measure of internal consistency, that is, how closely related a set of items
are as a group. It is considered to be a measure of scale reliability. The value of alpha (α) may
lie between negative infinity and 1.
Cronbach’s alpha, α (or coefficient alpha), developed by Lee Cronbach in 1951, measures
reliability, or internal consistency. “Reliability” is how well a test measures what it should. For
example, a company might give a job satisfaction survey to their employees. High reliability
means it measures job satisfaction, while low reliability means it measures something else (or
possibly nothing at all). Cronbach’s alpha tests to see if multiple-question Likert scale surveys
are reliable. These questions measure latent variables — hidden or unobservable variables like
a person’s conscientiousness, neurosis or openness. These are very difficult to measure in real
life. Cronbach’s alpha will tell you if the test you have designed is accurately measuring the
variable of interest.

69
Ø A correlation matrix shows, in brief, the interconnections between series of variables.
It computes correlation coefficients between variables represented in the same sequence
of rows and columns.
Ø Variance measures how far a data set is spread out. The technical definition
is “The average of the squared differences from the mean,” but all it really does is to
give you a very general idea of the spread of our data. A value of zero means that
there is no variability; All the numbers in the data set are the same.
• The data set 12, 12, 12, 12, 12 has a var. of zero (the numbers are identical).
• The data set 12, 12, 12, 12, 13 has a var. of 0.167; a small change in the numbers equals
a very small var.
• The data set 12, 12, 12, 12, 13,013 has a var. of 28171000; a large change in the
numbers equals a very large number.

70
Chapter-7
FINDINGS AND CONCLUSION

FINDINGS FROM THE RESEARCH
1. There were 16% females and 84 % of male respondents selected on simple random
sample basis with an average age of 38 years and been in SME sector for an average of
approximately 16 years.
2. 51% (approx.) of the total SME under the study fall into the category of trading
industry. Service vertical make a 33% (approx.) of total presence under this study.
Other verticals like manufacturing and agriculture sums up to 16% (approx.) of the total
population under study.
3. 39% of the respondents weren’t using digital technologies more than 20%; every
function of the business process is either operated physically or through smart phone.
39% of the total population under study was digitalized up to 20% only. Only 7
respondents were digitalized between 20%-40%, 11 respondents were using digital
technology between 40%-60%. A total of 13 respondents were using digital technology
from 60% to 100% that makes 25% (approx.) of the total.
4. All of the respondents except one uses smart phone for their business operations. Apart
from smart phones, desktop computer and internet modem each were used by 25
respondents which make 50% (approx.) of the population.
5. 33 Respondents use one or other kind of power back up system which is noted under
UPS. People uses other digital technologies like CCTV cameras, biometrics looks etc,
for their businesses there were a total of 28 respondents who were using these digital
equipment’s, it adds up to 55% (approx.) of the total population.
6. 45 respondents use WhatsApp for their business operations which make 88% (approx.)
of the population. Few of the respondents’ uses or have a business presence on
Facebook for the various business operations though it’s only 30% (approx.) of the
population.
7. 51% of the respondents accept online banking payments while 49% either don’t trust
the online processes or don’t have appropriate knowledge.
8. Only 4% of the respondents accept UPI/BHIM app payments while 96% either don’t
trust the UPI/BHIM or don’t have appropriate knowledge.
9. 57% of the respondents accept credit card payments while 43% don’t trust the processes
or don’t have appropriate knowledge or felt the machines used for same are costly.

10. 60% of the respondents accept mobile wallet payments and that to specific to payTM,
while 40% don’t trust the processes or don’t have appropriate knowledge.
11. Only 4% of the respondents use email and scanned documents for business
communication while 96% either don’t have appropriate knowledge or don’t like to use
it.
12. 69% of the respondents pay more than 80% of vendors through bank and that to specific
to payTM, while 31% make payments in cash to the venders.
13. Only 16% of the respondents’ pay more than 80% of their employee salary through
bank while 84% of them pay their employees in cash.
14. Only 22% of the respondents’ are aware of the objectives of Digital India Mission of
Government of India which are 11 in numbers whereas 78% of the respondents’ do not
have information about this mission by GOI.
15. The most adopted digital technology by the respondents was SMS/ voice message
marketing, by 50 respondents which makes a 98% of the total. Demonetization boosts
the use of digital finance, especially payTM, still only 29 respondents uses digital
finance and they too prefer cash or card payment first, as people don’t trust these digital
wallets. 45% of the respondents use accounting software as it reduces the effort of
billing.
16. Lack of knowledge & skill training about digital technologies is the challenge faced by
most of the respondents, which are 47 in number. Lack of developers/vendors who can
develop solutions is also was a big challenge for 14 of the respondents while only 7 of
the respondents felt the implementation was a costly investment.

CONCLUSION
Digital India Program initiated by Government of India is the leading initiative which will help
to reduce the gap between the rural and urban sectors of the nation. The Government of India
has implemented many Government services for the benefit of the rural people. The rural
people should be able to make use of these services for their benefit. This will surely eliminate
the Digital Divide of the country. Various projects of Digital India are still under
implementation phase. Some of the projects may require minute changes in future depending
upon the nation’s requirement.
• Above data shows that most of the SME’s are digitalize up to 20% only, people still
feel hard cash and physical operation are better than virtual options. Though events like
demonetization and GST push people to move towards digitalization but it will take
time to move this percentage from 20% to 100%. Making people believe the transition
through digital means is safe, is the toughest task of all.
• The mostly used technology as per the data is SMS/voice message marketing, as it
became need of the business because of growing popularity of online stores.
Accounting software are another hit among few of the respondents who have the
knowledge and capital for same, as it reduces the human effort and helps to maintain
transaction data. Use of digital finance like payTm is an impact of demonetization,
which made around 57% business to provide an alternate payment option to their
customers
• Some of the major challenges include:
1. Lack of adequate credit and capital.
2. Poor and inadequate infrastructural facilities.
3. Inadequate access and marketing linkages.
4. Technological obsolescence
5. Inadequate application of new technology.
6. Lack of skilled human resources.
7. The resistance to change people show during emergence of new technology.
8. Building trust among the people for change is difficult.

These challenges are huge and may not be possible to overcome entirely in the
immediate future. There is a need to create awareness of the usage and benefits of the above
among consumers as well as SMEs. By leveraging technology and with government
intervention, the vision of a Digital India may be achieved sooner than expected. The
digitalization brings innovation, ease of working, new job opportunities and growth in the
economy. It helps to bring transparency in the system and more transparent are the flow of
funds in the economy less is the problem of tax evasion, parallel economy etc. But with all
these benefits available it also makes it necessary for the people to have basic financial
knowledge and a push towards the importance of the financial literacy. With the help of which
they can protect their money in situations like inflation, depression, and know about different
financial products and services to save it for their better future. Digitalization can also play an
important role in achievement this goal as it can have a greater reach to the people. By this we
can reach on a conclusion that the new technology needs to harnessed well and for this it is not
only the availability but also the knowledge to use it and get benefits from it.

BIBLIOGRAPHY
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[2].Brannen, C. Sudhir Kumar Sharma, Vandana Lama, Nidhi Goyal, “Digital India: A
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[3].Clarry, J. MSME Annual Report 2014-15 (and various issues) Government of India.
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[4].Guvenir, H. A., & Erel, E. (1998). Multicriteria inventory classification using a genetic
algorithm. European journal of operational research, 105(1), 29-37.
[5].Hayakama, N KPMG the New Wave Indian MSME- An action agenda for growth.
kpmg.com/ in. Report of the Committee set up by Ministry of Finance Govt. of India
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[6].Hentschel, B., & Haghirian, P. (2010). Nonaka revisited: Can Japanese companies
sustain their knowledge management processes in the 21st century? In P. Haghirian
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[7].Kohlbacher, F Ministry of Micro, Small & Medium Enterprises. Report of The
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[8].Polanyi, M. Sultan Singh (2008) “A study of the Quality of Services Provided to SSI
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