New Delhi: Government will provide liberal subsidy to small and medium enterprises (SMEs) for using modern IT tools like cloud computing and improving their performance, secretary in the MSME Ministry Uday Kumar Varma said.

Textile workers working at their looms (File photo Bloomberg)

If we are able to create 5-6 successful clouds everybody will emulate," Varma told PTI in an interview.

The SMEs can have access to the latest computing technology, data and softwares without investing fortunes in them, through a common grid of a service provider.

The concept known as cloud computing is catching up fast, especially among those who cannot afford costly servers.

The MSME secretary said that while the government would provide substantial subsidy for cloud computing to the SMEs, it does not want “fly by night operators".

The Ministry is banking on the SME associations which will create special purpose vehicles (SPVs) to implement the technology upgradation schemes.

He said the subsidy funds could be released either to the SPVs or directly to the service provider depending on the advice of the Finance Ministry.

In an another initiative, the Ministry proposes to create a common platform for electronic registration of the MSME entrepreneurs.

Although the registration is required to be done at the District Industry Centres under the state governments, the Centre is willing to provide a common platform which can be used for e-filing of registrations.

However, the consent of state governments needs to be taken. “I am quite sanguine that state governments will come forward...this will eliminate delays and corruption," he added.

There are 26 million enterprises which employ almost 60 million people in the labour-intensive sector.

The MSME sector contributes over 45% to the country’s industrial production and around 40% to the total exports.