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“Digital MSME” Scheme for Promotion of Information and Communication Technology (ICT) in MSME Sector

The MSME sector is the backbone of the Indian Economy and one of the prime drivers of employment. Despite its apparent success in the last couple of years, Indian MSME sector is facing many challenges. Apart from the traditional problems, they are also increasingly exposed to international competition. Therefore, MSMEs in India – as everywhere else – need to improve their competitiveness by taking a variety of measures. The use of Information and Communication Technologies (ICT) is one of the important measures, which can greatly help MSMEs in almost every facet of their business.

Over the last few decades, ICT has facilitated business activities in many ways. It has become a key enabler for competitiveness, improved product and service delivery, lowered process costs and has supported Management Information systems (MIS). In some cases, ICT has been at the heart of the business model, offering new ways of doing business. In general, ICT applications have become essential for any enterprise that has to sustain or grow in a global environment.

The Scheme for “Promotion of Information and Communication Technology in MSME Sector” [ICT Scheme for short] is ongoing scheme from 11th five year plan, but it has been modified in view of emergence of the Cloud Computing Concept and named as “Digital MSME” Scheme.


The scheme is revolving around Cloud Computing which is emerging as a cost effective and viable alternative in comparison to in-house IT infrastructure installed by MSMEs. In cloud computing, MSMEs use the internet to access common as well as tailor-made IT infrastructure including software for managing their business processes. The common benefits of Cloud Computing approach are:

  1. Cloud computing is free from the burden of investment on hardware/software and infrastructural facilities. Therefore CAPEX converts into OPEX.
  2. It follows “pay as you use” model and the user does not have to invest upfront.
  3. The initial cost to use specific services gets reduced substantially.
  4. The Cloud Computing operations are readily scalable. The user can access various services depending upon the requirements.
  5. The use of Cloud Computing facilitates  device and location independent
  6. Maintenance / updation of Software  is not the responsibility  of the users.

The main objectives  of scheme are:

  1. To sensitize and encourage MSMEs towards new approach i.e Cloud Computing for ICT adoption in their production & business processes with a view to improve their competitiveness in national and international market. .
  2. Adoption of best practices to improve quality of products  and services.
  3. To benefit large number of MSMEs in terms of standardizing their business processes, improvement in delivery time, reduction in inventory cost, improvement in productivity and quality of production through cloud computing by reducing the burden of investment on Hardware/Software and Infrastructural activities using Cloud Platform.

The likely outcomes  of the scheme will be :

  1. To promote an echo system of cost effective and all inclusive ICT applications for MSMEs through Cloud Computing
  2. To establish Inter and Intra Networks amongst Technology Centers and Institutions of Office of DC, MSME
  3. To enable MSMEs to search for value chain (raw material,  experts)  online
  4. Adoption of best practices to improve quality of products  and services
  5. Reducing delivery cycle time
  6. IT as a medium of communication to revamp access to the markets, enhanced access empowers the market to undertake direct, faster and better transactions.
  7. Evolving internal efficiencies by way of intense ICT intake and automating procedure for cost reduction and capacity enhancement for information access, processing, collaboration and dissemination.

Read details about the scheme here

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