Ease of Doing Business for MSMEs: Udyam portal was launched after the government revised the MSME definition in June 2020 to bring more enterprises into the MSME fold.
Ease of Doing Business for MSMEs: 28,684 micro enterprises and 3,679 small businesses registered on the Udyam portal have grown into small and medium-sized businesses respectively since inception till March 22, 2022, according to the government data. The Ministry of Micro, Small and Medium Enterprises (MSME) through a notification on June 26, 2020, had changed the definition of MSME following which the Udyam portal was launched for registration of MSMEs only on July 1, 2020, said Minister of State for MSME Ministry Bhanu Pratap Singh Verma sharing the data in a written reply to a question in Lok Sabha during the ongoing second part of the Budget session.
As of March 27, 2022, 79.27 lakh MSMEs had registered on the portal, of which 75.41 lakh were micro enterprises, 3.50 lakh were small enterprises, and 35,773 were medium businesses. The data on medium enterprises growing into large businesses wasn’t shared by Verma in his response to the Parliament.
The Centre had revised the MSME definition to get more businesses to benefit from the schemes and initiatives offered by the government to MSMEs. Businesses up to Rs 1 crore investment and Rs 5 crore turnover were categorised under micro segment from earlier less than Rs 25 lakh investment. Likewise, less than Rs 10 crore investment and Rs 50 crore turnover were considered small businesses vis-a-vis up to Rs 5 crore investment earlier. For medium enterprises, the investment limit was expanded from less than Rs 10 crore to less than Rs 50 crore along with up to Rs 250 crore turnover. The revised definition had removed the distinction between the manufacturing and services sectors.
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The government had further expanded the MSME base in July last year to cover 2.5 crore wholesale and retail traders under the MSME ambit. The benefits, however, to these traders were restricted to loans under priority sector lending.
Importantly, under the erstwhile MSME definition, there were over 1.02 crore MSMEs with Udyog Aadhaar Memorandum (UAM) registration till June 2020, of which 89 lakhs were micro enterprises, 12.20 lakh were small businesses, and 49,840 were medium enterprises. However, the total count of unincorporated MSMEs in the country as per the National Sample Survey 73rd round during 2015-16 was 6.33 crore. 6.30 crore or more than 99 per cent of these units were micro enterprises.