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Digital reforms in India boost productivity in MSMEs: IMF paper
May-04-2026

The International Monetary Fund (IMF) in a working paper has said that India's digitalisation reforms in public administration have increased productivity in micro, small and medium enterprises (MSMEs) in states that implemented these changes. MSMEs account for approximately 35 percent of India’s manufacturing output, provide jobs to about 110 million people, and contribute about 45 per cent of the overall exports from India. 

Most MSMEs are not formally registered as companies under India's Companies Act of 1956 and only a few studies have been done on the impact of the business environment reforms on these unincorporated enterprises. The working paper stated the reforms in India’s business environment during 2010-11 to 2014–15 were primarily achieved through the digitalisation of business-related public administration. 

It noted that the financial burden of bureaucratic procedures is probably minor for large firms but could be significant for small businesses.  According to the paper, reforms are organized into six areas: tax systems, construction permits, environment and labour compliance, inspections, commercial disputes and single-window clearances.


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