Ease of Doing Business for MSMEs: Even as the quantity of MSMEs registered on the new Udyam Registration portal, which replaced the erstwhile approach of filing for Udyog Aadhaar Memorandum (UAM) in July last year, has scaled to 26.42 lakh as of April 20, 2021, as per the MSME Ministry information, the development is not extremely encouraging, according to specialists. The Reserve Bank of India had in August last year mandated enterprises, registered below Entrepreneur Memorandum (EM) element II and UAM till June 30, 2020, to file for new registrations on the Udyam Registration portal. EMs and UAMs have been valid till March 31, 2021, although MSME registration below UAM as of June 30, 2020, stood at 1,02,32,451 (more than 1 crore), according to the MSME Ministry 2020-21 annual report.
“While there is no data to show how many out of 26 lakh Udyam Registrations so far are new enterprises and how many have migrated from UAM or EM registrations but that is not a big figure. Many existing MSMEs are yet to apply for Udyam Registration due to reasons such as lack of awareness or lack of will as it is business as usual for them with their UAM or EM registrations and they haven’t faced any major challenge with the change in the law. The government and RBI would have to be a bit more stringent in getting MSMEs to register on new portal as the idea behind it is to consolidate MSME registration data at one place,” Pankaj Kumar, President, Indian Industries Association told TheSpuzz Online.
To boost ease of performing small business for MSMEs, the government had launched the Udyam Registration portal for paperless registration and classification of enterprises based on self-declaration. Small firms are not expected to upload any documents or proof except the Aadhaar quantity for registration. The MSME Ministry had also organized a single-window method at Champions Control Rooms (set up at MSME Development Institutes across India) and district industries centres for facilitating the approach.
Immediate comments for this story have been not out there from the MSME Ministry. The very same will be updated right here when shared.
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Before the MSME Development Act, 2006, the registration by MSMEs used to be at District Industries Centres (DICs). Subsequently, as per the provisions of the MSMED Act, 2006, MSMEs used to file EM- element I at DICs ahead of beginning an enterprise EM-element II following commencement of production. A total of 21,96,902 EM-II filings have been recorded involving 2007 and 2015, according to the MSME ministry annual report. From September 2015 to June 30, 2020, UAM has been in spot and as of December 31, 2020, micro MSMEs constituted 93 per cent of the registered enterprises on the Udyam portal although 6 per cent have been tiny enterprises and 1 per cent have been medium firms.
“MSMEs with Udyog Aadhaar were around 1 crore. After the RBI mandate, this 1 crore enterprise should have been converted into Udyam Registration but there is only 26 lakh so far and that is not a very exciting figure. Since the UAM was valid till March 31, it means that around 74 lakh MSMEs may be out of the registered MSME bracket. This means they wouldn’t be entitled to the priority sector benefits that are otherwise given to registered MSMEs,” Mukesh Mohan Gupta, President, Chamber of Indian Micro, Small & Medium Enterprises (CIMSME) told TheSpuzz Online.