Aparnna Pradhan 
India is making progress in using digital technology to improve the way the government works and the results are starting to show. A study by the International Monetary Fund found that changes to make the government more modern have really helped Micro, Medium Enterprises especially in states that made these changes between 2010 and 2015. During this time some Indian states started using systems instead of slow and complicated manual processes. They made it possible to register businesses online, get approvals and pay taxes more easily. This made it a lot easier for small businesses to work. For small business owners this meant they had more time to focus on growing their business and less time dealing with bureaucracy. The International Monetary Fund study found that states that made changes to use digital technology had a bigger increase in productivity among small manufacturing firms. It also found that the difference in productivity between businesses got smaller which means that using technology to govern made the business environment more balanced and efficient.
This is really important because Micro, Medium Enterprises are the backbone of Indias economy. They make up a part of the country’s manufacturing output, employ a lot of people and account for a significant portion of India’s exports. When small businesses do well it has an impact on employment, industrial production and household incomes. The people who wrote the report Somnath Sharma and Kenichi Ueda said that small businesses are often hurt by inefficient government processes more than big companies. A big company has the resources to deal with delays and complicated regulations. Small businesses often do not.
For a manufacturer or small business owner time spent getting licenses filing documents or getting approvals can mean less money earned, slower growth or missed opportunities. By making government services digital and reducing tape states made it easier for businesses to focus on productivity. The study also found that many Micro, Medium Enterprises in India do not follow formal business rules, which makes them more vulnerable to inefficient systems. In these cases even small improvements in governance can make a difference. However the report also found something. While productivity improved in states that made changes many small businesses did not move to states that made similar changes. This means that the benefits of using technology were mostly local helping businesses in their own areas rather than encouraging them to expand to other states.The main point of the report is clear: making the government more efficient is not about making things easier or looking modern. It can actually help the economy grow.
At a time when India is investing in public infrastructure and streamlining governance the International Monetary Funds findings are very supportive. As India tries to strengthen its manufacturing capacity, it becomes more competitive. Achieve inclusive growth helping Micro, Small and Medium Enterprises through efficient governance may be one of its best long-term investments. India and Micro, Small and Medium Enterprises can really benefit from this.
