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In Short:

A study by Vi Business found that 43% of MSMEs in India are planning to increase their digitalisation budget by 2025, with sectors like IT/ITeS, financial services, and transportation leading the way. Despite challenges, MSMEs are increasingly adopting digital technologies like cloud computing and IoT to boost productivity. The study highlights the progress made by small businesses in India and the need for future-proof operations.

MSMEs in India Increasing Digitalization Budget by 2025: Vi Business Study

According to a study by Vi Business, the enterprise arm of Vodafone Idea, 43% of micro, small and medium enterprises (MSMEs) in India are planning to increase their digitalization budget by 2025. Only 21% may decrease their budget while 28% aim to retain the current allocation.

Digital Maturity Index and Sectors

Vi Business revealed that sectors with lower Digital Maturity Index (DMI) are likely to increase their investments in digital transformation. The top three most digitally matured sectors are Information Technology/IT-enabled Services (63.3), financial services (62.3), and transportation (61.4). Meanwhile, retail and construction sectors are also progressing rapidly.

On the other hand, the telecom sector, pertaining to MSMEs manufacturing telecom and networking products, has the lowest DMI score of 54.8.

Positive Correlation with Turnover

The study also highlighted that increased digitalization has a direct positive correlation with turnover. Larger firms have embraced digitalization more than micro and small firms. Despite challenges like knowledge gaps and financial constraints, MSMEs are adopting digital technologies like cloud computing, IoT, and advanced workspace tools to enhance productivity.

Arvind Nevatia, Chief Enterprise Business Officer at Vodafone Idea, stated that the study showcases the progress and challenges of digital transformation among small businesses. The findings provide valuable insights for the future of MSMEs. Moreover, the company has launched an enhanced Digital Assessment Tool in English and Hindi as part of its MSME program.

Survey Details

The study is based on a survey of 1.6 lakh MSMEs in India across various industries, including IT & ITeS, construction, transportation, media & entertainment, retail, financial sectors, agriculture, professional services, education, tourism & hospitality, healthcare, and more.

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