Public AdministrationDigitalisation and Prepared by Somnath Sharma and Kenichi Ueda WP/26/86 IMF Staff Discussion Notes (SDNs)showcasepolicy-related analysis and research beingdeveloped by IMF staff members and arepublished to elicit comments and toencourage debate.The views expressed inStaff Discussion Notes are those of the author(s) 2026MAY IMF Working Paper Regional Office for Asia and the Pacific Public Administration Digitalisation and Microenterprise Productivity in India Prepared by Somnath Sharma and Kenichi Ueda* Authorized for distribution by Chad Steinberg IMF Working Papersdescribe research in progress by the author(s) and are published to elicitcomments and to encourage debate.The views expressed in IMF Working Papers are those of the ABSTRACT:We find that public administration digitalisation, carried out state-by-state in India between 2010and 2015, ledto an improvement in micro-enterprise productivities,based on the Unincorporated Non-Agricultural Enterprises Surveys. We categorise the digitalisation of public administration into six groups: tax filingand payments, construction permits, environment and labour regulations, inspections, commercial disputes, and RECOMMENDEDCITATION:Sharma,S.,and K.Ueda.2025.Public Administration Digitalisation andMicroenterprise Productivity in India. Working Paper WP/26/86. International Monetary Fund, Washington D.C. WORKING PAPERS Public Administration Prepared bySomnath SharmaandKenichi Ueda Contents Acronyms.............................................................................................................................................................3 2.1Definition of Reforms........................................................................................................................62.2Randomness of Reforms across States...........................................................................................7 3. Data..................................................................................................................................................................9 4.TFPR...............................................................................................................................................................10 5.Estimation of Reform Gains…………….…………………………………………………………………………..15 5.1Reform Ordering.............................................................................................................................155.2Matching Firms Across States and Years.....................................................................................155.3Difference-in-Difference Estimation................................................................................................165.4Benchmark Results........................................................................................................................17 6.Matching Firms in Border Districts………………………………………………………………………………..18 6.1Finding Information on Border Districts of Two States...................................................................186.2Results based on Firms in Border Districts...................................................................................19 7.Impact of Reform Differences….…………………………………………………………………………………..21 7.1Impact of Reform Difference on TFPR Gains.................................................................................217.2Impact of Reform Difference on TFPR Dispersion Reduction.......................................................227.3Robustness Check: Using Different Estimates of TFPR................................................................23 8.Conclusion………………..…….……………………………………………………………………………………..28 References.........................................................................................................................................................29 Appendix1. Theoretical Background: Total Factor Productivity Estimation..............................................31 Appendix2.Bordering Districts of Adjoining States in India.......................................................................33 Acronyms CPR-Construction Permit ReformsCST-Central Sales TaxCDR-Commercial Dispute ReformsDID-Difference-in-DifferencesELR-Environment and Labour Standard ReformsGDP-Gross Domestic ProductIMF-International Monetary FundIR-Inspection Reforms NIC-National Industrial ClassificationNPI-Non-Profit InstitutionNSS-National Sample SurveyNSSO-National Sample Survey OfficeOLS-Ordinary Least Squares (regression)SGDP-State Gross Domestic ProductSHG-Self-Help Group 1.Introduction We investigate whether public administration digitalisation, whicheases regulatory and policyburdens on business, leads tohigher productivity growth and lower productivity dispersion amongfirms in India. We focus on the micro-enterprisescoveredin the two rounds of the Unincorporated We find thatstates that undertakemore public administration digitalisation experience higherpr