DISSERTATION REPORT

On
Study on Adoption of Digital Technologies by
the Micro, Small and Medium businesses

Submitted in Partial Fulfilment of the Requirements

for
The Master’s Degree in Business Administration
Under the Guidance of: Submitted By:
Ms. Sugandha Joshi Priya Tiwari
Assistant Professor
210030500041

AMRAPALI GROUP OF INSTITUTES, HALDWANI

BATCH 2021-23

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 ACKNOWLEDGEMENT

The dissertation opportunity on the topic of Study on Adoption of digital

technologies by the micro, small and medium business. Therefore, We consider ourself as
a very lucky as we were provided with an opportunity to be a part of it. We are also grateful
for having a chance to meet so many wonderful people and professionals who led us though

this period. Ms .Sugandha Joshi Maam, for their careful and precious guidance which
were extremely valuable for our study both theoretically and practically.
We perceive as this opportunity as a big milestone in our career development. We will strive
to use gained skills and knowledge in the best possible way, and We 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,
Priya Tiwari

Place: Haldwani

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 DECLARATION

I, Priya Tiwari student of MBA IVth Semester, studying at Amrapali Group of

Institutes, Haldwani hereby declare that the dissertation report on “Study on Adoption of
Digital Technologies by the Micro, Smalland Medium businesses.” submitted to
Uttrakhand Technical University, Dehradun in partial fulfillment of Degree of Master’s of
Business Administration is the original work conducted by our group.
The information and data given in the report is authentic to the best of our knowledge.
This summer training report is not being submitted to any other University for award of any
other Degree, Diploma, and Fellowship.

Place: Haldwani

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 CERTIFICATE

I have the Pleasure in Certifying Miss Priya Tiwari, Student of IV th Semester of The
Master’s Degree In Business Administration (Batch 2021-23), of Amrapli Group of Institutes,
Haldwani ( Affilated by Uttrakhand Technical University, Dehradun).
They have completed Group Project work entitled “Study on Adoption of Digital
Technologies by the Micro, Small and Medium businesses.” under my guidance.
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.

Ms. Sugandha Joshi

Assistant Professor
Amrapai Group of
Institutes, Haldwani

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 EXCUTIVE SUMMERY

Micro, Small and Medium Enterprises (MSME) sector has emerged as a highlyvibrant
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
citizencentric, 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 servicesthrough
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 1
Acknowledgement 2
Student’s Declaration 3
Certificate of completion 4
Executive summary 5
Table of Content 6-7
List of Figures 8

Acronyms 9
2. Chapter-1 Introduction
Introduction to topic 11
Objectives of The Study 25
Scope of The Study 26

3. Chapter -2 Digital India Overview 28-38

History 29

Important Milestones 30

9 Pillars of digital India 31

Government initiatives 32

Major Players 36

SWOT analysis 37

4. Chapter -3 Research Methodology 39-43

Objective of the Study 40
Scope of the Study 40
Types of Research and Research design 41
Sample Design, Sample Size, Sample Type 42
Data Collection Method 42

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 Limitations of The Study 44
5.
Chapter- 4 MSME Investment and Employment 45 -47
Investment 46

Employment 47

6. Chapter-5 Data Analysis and Interpretation 48-62

Questionnaire Analysis 49
Analysis 61

7. Chapter-6 Findings & Suggestions 63-72

Findings of the Research 64
Conclusion 66

8. Bibliography 68

9. Annexure 69-77
Annexure-1 Photographs Showing Digital Implementation 69

Annexure-2 Questionnaire 70-74

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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

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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

11
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 crorein
termed as a small enterprise, and an enterprise with investment up to Rs.10 crore is definedas
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

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in this 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 varioussupport
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.

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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.
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
subceiling 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.

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 • 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

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 graduallygained
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

15
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
packagefor the rapid development of SMEs. With liberalization, rapid changes were seen in
the Indian economy.
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
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

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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.

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 percentare
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,

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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.
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 availablein
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.

18
 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
for35 million people and another 56 million indirectly.

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.

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  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
havestarted 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.

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
ofadvantages 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.

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  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 asan
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.
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.

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 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
Organizationwhich 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 Underutilization 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
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

22
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.
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

23
 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.

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 Objectives of The Study. -

Research Objective:
o Understand the diffusion level of digital technologies among micro, small and medium
businesses in both urban and semi-urban/rural India
 The key factors impeding digital transformation at grassroots level.
 To study present status of Digital Marketing as practiced by MSMEs.
 To identify factors that influences Digital Marketing Adoption by MSMEs
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 billionto
$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 just8%,
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
To what extent MSME sector is using digital technologies 2.2.
What are the digital technologies adopted by the MSME sector?
What are the business processes that has been digitised most?
What are the key impediments/pain-points in adoption of digital technologies by MSME
sector?
What is the overall perception of MSME sector about digitalisation policies of
government? (e.g. Adhaar, Digital India, Demonetisation etc.)

25
 Scope of The Study. -
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.

26
 Chapter –2
DIGITAL INDIA
OVERVIEW

27
 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,
DedicatedFreight 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.

28
 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 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 whichwould
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.

29
 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 in the development stage - including Kochi Smart City, Gujarat
International Finance TecCity (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 AllUrban
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

30
 project cost is estimated to be around Rs 15,686 Cr for implementation in 2 years and
maintenance & support for 5 years.

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

31
 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.

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.
 Electronic Databases – all databases and information should be electronic and not
manual.
 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.
 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

32
 eGovernance 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
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
cyberspace 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.

33
• 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.
• 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

34
 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.

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 inother
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
wifi 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)

35
 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.

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.

36
 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
• 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 thebanking 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.

37
 Chapter –3
RESEARCH
METHODOLOGY

38
 CHAPTER – 3
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.- Scope of The Study. -

Micro, Small and Medium Enterprises (MSME) sector has emerged as a highlyvibrant
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
39
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:

 Exploratory Research Design

 Descriptive Research Design
 Causal Research Design

40
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 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 100 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:

 The study proposed to collect Primary Data through questionnaire using survey
method. So as to give a precise, accurate, realistic and relevant data.
 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 was conducted online.

41
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.
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 online 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 100 was considered sufficient in view of the time and resource
constraint.
Data Collection Procedure:
 Type of data: Primary and Secondary Data
 Methods of collecting primary data: e-questionnaire
 Methods for filling questionnaire: Android Application Instruments used:
The instruments that we have used for the survey are:
 e-questionnaire
 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

42
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:
 Simple percentage and average
 Bar graphs, Pie charts, doughnuts charts and area charts

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 100 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.

43
 Chapter – 4
MSME INVESTMENT
AND
EMPLOYMENT

44
 CHAPTER – 4
MSME INVESTMENT AND
EMPLOYMENT

45
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

46
 Chapter-5
DATA ANALYSIS AND
INTERPRETATION

47
 CHAPTER-5
DATA ANALYSIS AND
INTERPRETATION

1. Demographic Data and its Interpretation

i. Gender of respondents

Gender of respondents

16%

Male
84% Female

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.
• All these respondents were in the business from a few months to a maximum of
37 years, with an average of 16.68 years.

48
 ii. Industry Vertical of the business.

INDUSTRY VERTICAL
Number of Respondents

26

17

6
1 1

TRADING SERVICE MANUFACTURINGAGRICULTURE OTHER

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.

49
 Question 1: To what extent SME sector is using digital technologies?

i. Percent of business is digitized.

20

18

16

14

12

10

0
0%-20% 20%-40% 40%-60% 60%-80% 80%-100%

Number of respondents

Percentage Usage of Digital Technologies

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.

50
 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.

51
 iii. Social Media pages for your business

Social Media pages for your business

50
45
40
35
30
25

45
20
15
10
15
5
0
Facebook
3
0 0 0
Other
Twitter Linkedin Whatsapp YouTube

Number of Respondents

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.

52
iv. Accepting online banking payment in business operations

Accepting online banking

payment
Yes No

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

Accepting UPI/BHIM App

Payment
4%

Yes No

96%

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.

53
 vi. Accepting credit card payment for business operations

Accepting credit card payment

43% Yes
No
57%

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

Accepting mobile wallet (e.g. PayTM) payment

40% Yes
No
60%

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.

54
 viii. Usage of email and scanned documents for business communication

Usage of email and scanned documents

4%

Yes No

96%

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)

Accepting orders/enquiries through messaging

2%

Yes
No

98%

Interpretation:
Only 2% of the respondents’ do not use accept orders/enquiries through messaging while
98% accept orders/enquiries through messaging.

55
 x. Paying more than 80% of vendors through bank

Paying more than 80% of vendors through bank

31%
Yes
69% No

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

Paying more than 80% of employee salary through bank

16% Yes
No

84%

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.

56
 xii. Awareness of the objectives of Digital India Mission of Government of India

reness of the objectives of Digital India Mission of Government of India

22%
Yes No
78%

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.

57
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.

58
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.

59
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.

60
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.

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.

61
 Chapter-6
FINDINGS AND
CONCLUSION

62
 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 by25
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.

63
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 theeffort
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.

64
 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.

65
 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
welland for this it is not only the availability but also the knowledge to use it and get benefits
from it.

66
 BIBLIOGRAPHY

[1]. Alston, Tanuja R. Patil, Shamshuddin.K., Rajashekhar Patil, Sadanand P., “Krishi
Samriddhi: A Decision Support System for Farmers to get High Yield Crops”-
International Conference on Computational Techniques in Information and
Communication Technologies (ICCTICT), March-2016.
[2]. Brannen, C. Sudhir Kumar Sharma, Vandana Lama, Nidhi Goyal, “Digital India: A
Vision Towards Digitally Empowered Knowledge Economy”- Indian Journal of
Applied Research, October-2015.
[3]. Clarry, J. MSME Annual Report 2014-15 (and various issues) Government of India.
Prime Minister’s Task Force on MSME (Jan. 2010) Government ofIndia.
[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
to examine the financial architecture of the MSME sector February 2015.
http://msme.gov.in/
[6]. Hentschel, B., & Haghirian, P. (2010). Nonaka revisited: Can Japanese companies
sustain their knowledge management processes in the 21st century? In P. Haghirian
(Ed.), Innovation and change in Japanese management (pp. 199–220). London:
Palgrave Macmillan.
[7]. Kohlbacher, F Ministry of Micro, Small & Medium Enterprises. Report of The
Working Group on Micro Small & Medium Enterprises (MSMEs) Growth for 12th
Five Year Plan (2012-2017)
[8]. Polanyi, M. Sultan Singh (2008) “A study of the Quality of Services Provided to SSI
Customers by Public Sector Banks”, in The IUP Journal of Bank Management,Vol.VII.
[9]. Richards, G Veenapani, A (2005) “Strategic Repositioning of SMEs for Globalizing
India”, in the SEDME, Vol. 32(3).

67
ANNEXURE

68
 Questionnaire. -
i. Researcher ID *: ......................................................................
ii. Enter your unique ID:
...................................................................... iii. Business Name *:
......................................................................
iv. Contact Person *: ......................................................................

v. Gender *: Male Female vi. Age.

...................................................................... vii. Address......................................
Street address ...........................City..........................
State/Province..................................... Postal/Zip Code.........................................
viii. Mobile Number* ....................................Alternate Number...............................
ix. Email. ......................................................................

x. Industry Vertical *
xi. Sub Vertical *

xii. Industry Vertical (Other)

Specify Industry Vertical

xiii. Do you consent to be part of this study? *

YES No
xiv. Is it possible to rearrange the interview at a later date?

Please pick a date

xv. Specify why no consent given?

xvi. How long have you been in this business?

..............................................

69
 Research Question 1: To what extent MSME sector is using
digital technologies?
xvii. What percent of your business is digitized?..................................xviii.
Digital Equipment’s

Desktop Computer Laptop Computer

Smartphones Feature Phones

Scanner Inkjet Printer

Laser Printer Photocopier

Fax Computer Server

Internet Modem/Routers Firewalls

UPS Plotter Machine

Others
xix. Social Media pages for
your business?

Facebook WhatsApp

LinkedIn Twitter

Google+ YouTube

Instagram Other

xx. Please provide your social media handles

a. Facebook

b. LinkedIn

c. Instagram/WhatsApp

xxi. Do you accept online banking payment in your business?

Yes No

70
xxii. Do you accept UPI/BHIM App Payment for your business?

Yes No
xxiii. Do you accept credit card payment for your business?

Yes No
xxiv. Do you accept mobile wallet (e.g. PayTM) payment for your business?

Yes No
xxv. Do you use email and scanned documents for business communication?

Yes No
xxvi. Do you accept orders/enquiries through messaging (e.g. SMS/WhatsApp)?

Yes No
xxvii. Do you pay more than 80% of your vendors through bank?

Yes No
xxviii. Do you pay more than 80% of employee salary through bank?

Yes No
xxix. Are you aware of the objectives of Digital India Mission of Government of
India?

Yes No

Research Question 2: What are the digital technologies adopted by the MSME
sector?
xxx. Which of the following digital technologies you are currently using

Website

Mobile App
SMS/Voice Message marketing

Digital Finance (e.g. Online Payment, Mobile Wallet etc.)

Appointment Management Software

Social Media for Business (e.g. Business Pages in Facebook etc.)

Accounting Software

71
 Inventory Software

Customer Relationship Management Software (CRM)

Customer Service Software (e.g. Zen desk etc.)

Enterprise Resource Planning (ERP) Software (e.g. Oracle, etc.)

Toll-Free Numbers

Customer Contact Centre

Other

None of the above

xxxi. Specify Technology (other)

xxxii. Which of the above technologies you use most?

xxxiii.S
ince how many months you are using this technology?
xxxiv. Which of the above technologies
you use next?

xxxv.S
ince how many months you are using this technology?
xxxvi. Which of the above technologies
you use next?

xxxvii.S
ince how many months you are using this technology?

Research Question 3: What are the key impediments/pain-points in the adoption

of digital technologies by MSME sector?
xxxviii. Which of the following challenges you faced while implementing digital
technologies in your business?

Lack of skill training on digital technologies

72
 Lack of skilled developers/vendors who can develop solutions

Lack of knowledge about digital technologies

High cost/investment required to go digital

Other
xxxix. Specify other challenges

xl. What according to you is the number one challenge from the above list?

xli.
What according to you is the number two challenge from the above list?

xlii. What according to you is the number three challenge from the above list?

73