FASII’s National Seminar on “Digitalisation and AI in the Indian MSME Sector Driving the Nation becoming A Super Economic Power” on 30th June, 2025, at Kolkata

The objective of the Seminar is to impart knowledge and information to the micro and small enterprises on (1) Digital & AI transformation (2) Various changes taking place on the trade, industrial, labour and fiscal fronts (3) Different Schemes of the MSME Ministry (4) Credit Availability with Banks and Schemes like Credit Guarantee (5) On technology upgradation – acquiring latest & modern technologies, and sourcing Credit in this regard (6) availability of skills

1. Digital & AI transformation
   Digitalisation, generally means, adaptation of a system, process, etc. to be operated with the use of computers and the internet. Digitalisation in the MSME sector enables easy-automation, streamlining of operations, and improves overall efficiency. Also, Digital marketing allows MSMEs to reach a wider customer base, including international markets. It enhances customer engagement and satisfaction. Moreover, Digitalisation facilitates easier access to loans and other financial services and leads to reduced operational costs and optimised resource management. Cyber threats and data privacy issues, however, pose significant risks. MSMEs should be cautious and vigilant in this regard.
   Artificial intelligence (AI) is defined as a set of technologies that enable computers to perform a variety of advanced functions, including the ability to see, understand and translate spoken and written language, analyze data, make recommendations, and more. AI presents a significant opportunity for India’s MSME sector, but adoption faces challenges related to cost, expertise, and awareness. Many lack the resources and knowledge to effectively integrate AI with their business. Developing a homegrown AI model tailored to the unique needs and context of Indian MSMEs is crucial for successful adoption.
2. Changes Taking Place in Industrial, Trade, Labour and Fiscal Fronts:
   On the Trade front, India’s economy is being integrated with the global marketplace through free trade and investment. Further, peak customs duty has been significantly lowered and at the same time the duty on certain items has been increased to safe-guard the Indian industry. Moreover, export procedures have been streamlined and GST has been eliminated on exports. Special Economic Zones have been established to attract investment and promote exports. Policies are formulated to encourage E-commerce exports.

On the Industrial Front, Industrial licensing has been reduced, Locational Policies have been relaxed, Disinvestment in Public Sector is being implemented, Liberalisation has been done with reference to Foreign Direct Investment, Carried out Infrastructure Development particularly in the sectors of Transport, Communication and Power, Separate policies for the Promotion of MSMEs etc.

On the Labour front, according to the Union Government, the total number of workers, comprising of organized and unorganized sectors, is more than 50 crores. A majority of these workers i.e. around 90 percent, are in the unorganized sector. The Central Government has taken the step of codifying 29 laws into 4 Codes Now all workers of the organized and unorganized sector will get the minimum wages and a large section of workers in unorganized sector would also get social security. For ensuring workers’ right to minimum wages, the Central Government has amalgamated 4 laws in the Wage Code, 9 laws in the Social Security Code, 13 laws in the The Occupational Safety, Health and Working Conditions Code, 2020 and 3 laws in the Industrial Relations Code.

Fiscal reforms in India refer to the policy measures undertaken by the government to improve the management of public finances, aiming to reduce the fiscal deficit, enhance revenue collection, and promote economic growth. Key aspects of the Fiscal Reforms are: Simplifying the tax structure and broadening the tax base to increase revenue, Rationalizing tax rates and minimizing tax exemptions to improve compliance, Introduction of Goods and Services Tax (GST) to create a unified indirect tax system.

3. Different Schemes of the MSME Ministry:
   Some of the Notable schemes in respect of MSMEs are: Credit Guarantee Scheme, ISO 9000/ISO 14001 Certification Reimbursement, Micro & Small Enterprises Cluster Development Programme, Micro Finance Programme, MSME Market Development Assistance (MDA), International Cooperation Scheme, National Awards (Individual MSEs), National Manufacturing Competitiveness Programme, The ZED Certification Scheme, NSIC schemes like Performance and Credit Rating, Bank Credit Facilitation, Raw Material Assistance, Single Point Registration, Infomediary Services, Marketing Intelligence Services, Bill Discounting etc.
4. Credit Availability with Banks and Schemes like Credit Guarantee:
   Specific targets for lending to MSME sector have been prescribed in Priority Sector guidelines, Banks have been mandated not to accept collateral security in the case of loans up to ₹10 lakh extended to units in the MSE sector, Computation of working capital requirements of MSE units to be minimum 20% of the projected annual turnover for borrowal limits up to ₹5 crore, Trade Receivables Discounting System (TReDS) has been operationalized to address the problem of delayed payments to MSMEs, Under Pradhan Mantri Mudra Yojna (PMMY) Government has taken various steps towards effective implementation of the Scheme, SAMADHAAN Portal launched for monitoring of outstanding dues to the MSEs from the buyers of goods and services and so on.
   
   On technology upgradation – acquiring latest & modern technologies, and sourcing of Credit in this regard:
   Ministry of MSME has been implementing Credit Linked Capital Subsidy and Technology Upgradation Scheme (CLCS-TUS) for promoting competitiveness amongst Micro, Small and Medium Enterprises (MSMEs) by the way of wastage reduction through Lean Manufacturing, support for Design improvement, building awareness on Intellectual Property Rights, Zero Defect Zero Effect (ZED) Scheme, digitally empowerment of MSME through Digital MSME and to promote & support untapped creativity of individual and to promote adoption of latest technologies in manufacturing as well as knowledge based innovation MSMEs through Incubation across India.
5. MSME Champions scheme has been formulated through Standing Finance Committee (SFC) by merging all 6 components of erstwhile Technology Upgradation Scheme (TUS) for a period of 5years i.e 2021-22 to 2025-26. It is a Holistic Approach to unify, synergize and converge various schemes and Interventions with a single purpose. The end objective is to pick up clusters and enterprises and modernize their processes, reduce wastages, sharpen business competitiveness and facilitate their National and Global reach and excellence. There are 3 components under the new MSME Champions scheme. Further details are available in the MSME Ministry portal.
6. Skill Development Programme:
   India has several skill development schemes aimed at enhancing the employability of its youth. Key initiatives include the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), National Apprenticeship Promotion Scheme (NAPS), and Jan Shikshan Sansthan (JSS). These schemes provide training, certification, and apprenticeship opportunities across various sectors and skill levels. These schemes, along with others, are part of a comprehensive effort to create a skilled workforce and promote entrepreneurship in India. For the first time since India’s independence, a Ministry for Skill Development & Entrepreneurship (MSDE) has been formed to focus on enhancing employability of the youth through skill development.
7. Conclusion: The MSME sector in India makes a contribution of around 30% to the nation’s GDP. Moreover, it contributes about 40% to the total exports of India and provides more than 110 million job opportunities in the country. FASII takes pride in serving the MSMEs particularly the Micro and Small Enterprises in the country. It is a fact that over 95% of the units in the MSME sector are proprietorship-units. Despite, odds and constraints, the sector has been setting new records every year. FASII maintains the golden link with the concerned ministries and departments of the Union and State Governments and clearly has an extra edge over other MSE organisations in the government programmes and events. Days are changing. The Micro and Small Enterprises must be willing to change and adapt new techniques and new technologies. Knowledge needs to be gained. The objectives set out above in respect of the National Seminar are for the enterprises to learn, gain, plan and change. FASII wishes all the enterprises success and happiness for today and the days to come with a motto to make India Super Power Economy.