digitisation – Bada Business

Here Are 3 Major Roadblocks on the Path of Indian MSMEs’ Road to Digital Transformation

New Delhi, November 24: Indian MSMEs realised the importance of digitisation amid the coronavirus crisis. Infact, digitisation opened the gates for many local businesses and helped them strengthen their operations and cope better with stressful times.

However, there are some roadblocks on the path of Indian MSMEs which needs to be cleared to achieve success.

Limited growth capital: MSMEs have limited growth capital that makes technology adoption and digital transformation demanding.

Expensive: Digitisation is an expensive affair, from buying the latest smart devices, strong internet services, to getting skilled employees to manage the system.

Unaware of digital impact: Indian MSMEs are still unaware of digitisation and they fail to create customer loyalty and retention.

India’s micro-, small- and medium-sized enterprise sector is a vital contributor to the country’s growth story. According to a 2019 study conducted by YES Bank, it revealed that over 50 percent of digitally-empowered MSMEs improved their profits, operational efficiencies, as well as customer engagement. In addition to this, the Narendra Modi government has pushed out several initiatives to boost the sector.

MSMEs are not alone in their journey to digitisation, e-commerce companies like Amazon and Flipkart to corporates like Mastercard all have been doling out initiatives to help the MSME sector. Also, several startups like Khatabook, FarEye, Udaan, and others are dolling out several initiatives to help MSMEs in the digitisation journey.

Earning Optimism is on the Rise Post Sharp Downgrades Amid COVID-19 Pandemic

Mumbai, November 20: In a piece of positive news, earning optimism is on the rise post sharp downgrades amid COVID-19 pandemic earlier this year. According to an IANS report, a study done by ICICI Securities noted that coronavirus resulted in the steepest downgrade since the great financial crisis (GFC) of 2018 and now the prospects for earnings going ahead have improved.

The phenomenon was validated as Q2FY21 beats outpaced misses due to low expectations, cost-saving initiatives, rural demand, benign input prices and pockets of pent-up demand which were seen due to the festive season.

The report noted that nominal GDP is broadly expected to be flat or marginally lower in FY22 compared to the FY20 base, which would mean zero to negative GDP growth over FY20-FY22. The report further highlighted that given the high output gap seen in the pre-Covid period (FY20 GDP growth of 4.2 per cent), it is unlikely that FY23 will see a sudden return to potential real GDP growth of eight per cent.

In addition to this, policy measures introduced by the government to bring relief amid the pandemic like attracting investments in agriculture, lower corporate tax rates, digitisation will be beneficial in creating demand over the medium to long term.