Impact of Covid-19 on Digitalization Aspect on India’s MSMEs

Abstract

Covid-19 pandemic has brought severe health and economic shocks globally. World economy shrank. Businesses especially MSMEs faced severe brunt which even challenged their survival. The importance of MSME sector for Indian economic development cannot be ignored. This sector contributes to industrial production, GDP growth, export earnings, employment generation, regional development, economic diversification and social stability. This exploratory research paper aims to study the impact of pandemic on economy in general and on MSMEs specifically. It also studies how the pace of digitalization of MSMEs have been impacted by the pandemic. It explores the various benefits digital tools and technologies have for MSMEs; what challenges come in the way of successful transformation. And despite many challenges why is it now easier for willing businesses to digitally transform themselves. The present study also discusses various initiatives that have been taken by government and private players to help MSMEs recover. This is an exploratory paper based on secondary data. Recent literature has been reviewed, various reports by World Bank, OECD, UNCTAD, Deloitte, IBEF, ITC, McKinsey, etc. have been analyzed. Newspaper articles from Economic Times, Entrepreneurship India, Times of India and Business Today have also been referred.