Top 4 Government Schemes to help MSMEs with Digitalization
The world is currently fighting signs of inflation and the threat of recession brought on by less-than-ideal economic conditions caused by a global pandemic and compounded by the war in Europe. And as small and medium-sized businesses in India continue to break away from the negative effects of the past couple of years, India is banking on MSMEs reaching their full potential to escape from the adverse effects of a global recession.
MSMEs form the backbone of most sturdy economies since they increase employment opportunities as they grow while simultaneously injecting money back into the economy. One of the crucial moves that help MSMEs scale is going digital and being able to sell their products/services online to a much larger consumer base. Unfortunately, many MSMEs don’t have the finances or skillset to digitalize.
Before MSMEs can even digitalize, however, there’s a middle step that such businesses need, which is to align their techniques and technologies in a way that would make it easier for them to take advantage of the opportunities that digitalization presents.
This is why the government has gone to great lengths over the last 5 years to launch schemes with the specific aim of helping such businesses digitalize but very often, businesses don’t know which ones will suit their needs the most.
4 Indian government schemes to help MSMEs digitalize and scale their business
So here are 4 government schemes to help MSMEs digitalize:
Quality Management Standards & Quality Technology Tools (QMS/QTT) Scheme
Digitalization means nothing without the tools that can sustainably help you do business. This scheme was started specifically so that businesses could leverage technology to increase the quality of their products, which helps the industry stay competitive.
Through this scheme, MSMEs can learn about Quality Management Systems and Quality Technology Tools, so these businesses can use their resources effectively, manufacture efficiently and improve inventory ordering in terms of raw materials.
National Manufacturing Competitiveness Programme (NMCP)
Started by the Ministry of Micro, Small, and Medium Enterprises, the program was created to holistically help manufacturing MSMEs in order to stay competitive in the global manufacturing sector.
Under this scheme, MSMEs can acquire various skills as well as the financing needed to successfully run and scale their businesses. Some of the specific goals of the program are to help MSMEs in the sector through Quality Tech Tools while also helping them upgrade their technology, get marketing assistance, and digitalize so they can do business more effectively.
Credit Linked Capital Subsidy Scheme (CLCSS)
Launched by the Ministry of Small-Scale Industries, CLCSS scheme aims at providing capital subsidies to SSI units on any institutional finance or credit that has been extended to them in order to upgrade any production equipment or production technology.
The liberalization of the economy means that competition increases in the sector but a distinct lack of investment and awareness about modern manufacturing techniques and technologies prevents SSI units, with their outdated technologies and machinery, from being able to produce a high-quality product at scale. It is key for such businesses to continue upgrading both techniques and technology to reduce the cost of production and stay competitive in terms of price in a crowded global market.
Raising and Accelerating MSME Performance (RAMP)
Perhaps the most recent of a host of schemes launched by the Modi government in order to support and back on the development of the MSME sector, this scheme allocates INR 6000 crore so that MSMEs can grow while taking advantage of all the existing schemes in tandem with this one.
RAMP will help MSMEs just as they are starting out in ideation and innovation while also helping to incubate the new business by raising awareness of the necessary quality standards, manufacturing technologies, and how to improve practices and systems, especially when it comes to staying competitive globally. These businesses also get assistance in deploying technological tools and enhancing market access so they can stand on their own feet.
Bottom line – Stay competitive in an ever-changing market
While it is easy to think of digitalization as just an online presence, for MSMEs, it can mean far more than that. Having the necessary technology and tools in order to do business smoothly, whether it is managing inventory or manufacturing without defects, is key in helping MSMEs stay competitive in an ever-evolving market.
The schemes mentioned above are only a few of the many schemes that have been created to help MSMEs grow and scale. For a more exhaustive list, one can visit the website of the Ministry of Micro, Small, and Medium Enterprises.