DIGITAL MSME

“Digital MSME” Scheme for Promotion of Information and Communication
Technology (ICT) in MSME Sector
1.0 INTRODUCTION
1.1 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.
1.2 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.
1.3 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.
2.0 SCHEME CONCEPTS, OBJECTIVES AND OUTCOME:
2.01 Concept:
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:
i. Cloud computing is free from the burden of investment on hardware/software and
infrastructural facilities. Therefore CAPEX converts into aPEX.
ii. It follows “pay as you use” model and the user does not have to invest upfront.
III. The initial cost to use specific services gets reduced substantially.
iv. The Cloud Computing operations are readily scalable. The user can access
various services depending upon the requirements.
v. The use of Cloud Computing facilitates device and location independent access.
VI. Maintenance / updation of Software is not the responsibility of the users.
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2.02 Objectives and Outcome:
The main objectives of scheme are:
I. 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. .
ii. Adoption of best practices to improve quality of products and services.
iii. 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 :
i. To promote an echo system of cost effective and all inclusive ICT
applications for MSMEs through Cloud Computing
ii. To establish Inter and Intra Networks amongst Technology Centers and
Institutions of Office of DC, MSME
iii. To enable MSMEs to search for value chain (raw material, experts) online
iv. Adoption of best practices to improve quality of products and services
v. Reducing delivery cycle time
VI. IT as a medium of communication to revamp access to the markets,
enhanced access empowers the market to undertake direct, faster and
better transactions.
vii. 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.
2.03 For CLOUD based ICT applications through utility usage model, only the
subscription and usage fee would be applicable.
The modified scheme will sensitize and encourage MSMEs towards this new
approach i.e. CLOUD COMPUTING for ICT adoption. The modified scheme has been
evolved as an alternative and more effective arrangement for ICT adoption among
MSMEs. For sensitizing MSMEs and to motivate them to go for Cloud based ICT
implementation, awareness programmes and wide publicity through Print ,Electronic
and Radio have been incorporated in the scheme.
2.04 In the present-day world, relevance of “ICT for Smart” for all industry is a key
means to enhanced productivity. Seamless flows of data and information could
generate more economic value than the global goods trade, bridging technology gaps
by prioritizing and incentivising adoption of Internet of Things (Industry 4.0) and need a
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mission to enable industry to adopt the Industry 4.0 technology for improving
productivity may be considered. With this background,NPC has proposed to establish
Centre of Excellence on IT for Industry 4.0 and Lean Manufacturing (COE-ITfor 14.0 &
LM). The Digital MSME initiative shall develop suitable linkages with COE-IT.
2.05 Under this scheme, large number of MSMEs would be benefited in terms of
standardization of their business processes, improvement in delivery time, reduction in
inventory carrying cost, improvement in productivity and quality of production,
controlling of cost & time, improved customer satisfaction etc. through cloud computing.
3.0 THE COMPONENTS OF SCHEME:
The following activities are proposed to be undertaken under the scheme:
3.1 Awareness Programme and Work Shop:
(A) Awareness Programme: The objective of these programmes is to create
awareness amongst MSMEs about the benefits of implementing ICT in their enterprises,
details of the scheme, explain them about how to avail the benefits of scheme,
procedural methodology for participating in the scheme. The ICT needs of MSME will
also be assessed during the programme and accordingly they will be advised in
selecting Cloud Computing services suitable to them. The deliverable, funding and
implementation details are given as under:
1. About 90 one day state level programmes will be organised by field institutes of
0/0 DC-MSME mainly MSME-Dls organised in association with a National/State
level or prominent Industry association.
2. In the awareness Programme Implementing Agency (IA) as a Key Technical
Experts along with Cloud computing service providers should be essentially
involved.
3. Apart from technical deliberations, there should be live demonstration of ICT
through Cloud Computing services.
4. Funds will be provided @Rs.0.70 lakhs per programme. In addition,max. Rs.
0.55 lakh kept for TAlDAlLodging expenses for official of IAITCIL subject to
actuals for one day as per entitlement to be re-imbursed by respective
DI.Participation of minimum 75 MSEs should be ensured per programme.
(8) Work Shop : The objective of the Work Shop is to have interaction amongst
various stake holders i.e IA,CCSPs, Industry Associations and other relevant
participants under the overall directions of % DC(MSME).The Work Shop will be
organised by IAI MSME-Dls with the involvement of industry chambers/associations etc.
,if required. Funds will be provided to IAI MSME-DI @ Rs.5.00 lakh per Work Shop per
day. Participation of Minimum 50 MSMEs should be ensured per Work Shop.
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3.2 Cloud Computing:
1. To encourage MSEs to use Cloud Computing for ICT applications, it is proposed
to provide subsidy for user charges for a period of 2 years. The benefits
accrued through implementing ICT for subsidy period in their enterprises will
motivate MSEs to continue to use the ICT application with their own expenses
after this period.
Cloud Computing services will be provided with subsidy: Max. subsidy of Rs. 1 lakh per
unit will be disbursed over a period of 2 years to Micro and Small Enterprises.
2. Subsidy will be on cost of usage services which will be shared by the Gol and
MSE. The infrastructure (Hardware, Internet etc.) for accessing the cloud
computing will be the responsibility of concerned MSE unit.
3. The rate of subsidy will be as follow:
Rateof Subsidy Amount of
subsidy per
MSE (Rs. In
Lakhs)
Eligibility 15 year 2nd year
1 All Micro & Small 60% 60% 1.00
Enterprises in the
category of OTNER
2 All MSEs in the 60% +additional 60% +additional 1.00
category of 10 % of rate of 10 % of rate of
NER,SC/ST,Women, OTNER OTNER category
Divvanq category
Subsidy for 3rd year may be considered at later stage
4. The MSEs will apply to the Service Provider/ IA and lodge their request on official
website/ National Portal for availing the benefit of subsidy.
5. Subsidy disbursed will be through DBT route. MSEs initially will make full
payment to service provider. % DC (MSME) will disburse funds to TCll who in turn
will transfer it in the account of MSEs.
6. Though the First Come First Serve will be important criteria for selection of
MSEs under the scheme but factors like financial soundness, product range, export,
scope for expansion, Turn over etc. will also be considered by IA for selecting an MSE,
if required. IA will keep informed PMAC in this regard.
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7. IA will provide the details of user charges/subsidy to be released on monthly
basis to % DC-MSME, for timely release of subsidy and to ensure subsidy payments
are within the available budget allocations.
8. Initially, following four applications will be made available to MSMEs through
various service providers:
(i) ERP
_ (ii) Accounting
(iii) Manufacturing Design
(iv) Regulatory Compliances including GST
More applications may be added need based in due course of time.

To avail this subsidy please register in

Digital MSME scheme

Deputy Director

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