The Reserve Bank of India (RBI) had last year said that existing EMs part II and/or UAMs of MSMEs obtained before June 30, 2020, will continue to remain valid till March 31, 2021, even as they had to register before March under Udyam Registration on or after July 1, 2020.
The number of MSME registrations on the Udyam Registration portal will level the 1 crore mark of MSMEs registered under Udyog Aadhaar Memorandum (UAM) in most likely around two-and-a-half or three-year period from the current 33 lakh, PHD Chamber of Commerce and Industry’s MSME Committee Chairperson Mohit Jain told Financial Express Online in an interaction. As of Tuesday, registrations on the new MSME registration portal, launched in July 2020, had crossed the 33-lakh mark from 30 lakh as of May 16, 2021, the available data from the MSME Ministry showed. A total of 1.02 crore MSMEs, as per the government data, were registered under UAM after its implementation in September 2015. The new Udyam Registration had replaced UAM in June last year following the government’s revision of the MSME definition in May. Before UAM, MSMEs had to file Entrepreneur Memorandum (EM) part-I at District Industries Centres before setting up the MSME and EM-II after beginning the production work. Between 2007-15, 21,96,902 EM-II filings were recorded.
“Udyam Registration has enhanced the speed of the registration process as you can simply do it with just an Aadhaar number. Given that the 33-lakh figure has been achieved in around 11 months, the portal will most likely achieve the 1 crore number in around a two-and-a-half or three-year period — unlike around five years taken for UAM to reach that milestone — because of ease of registration on the new portal. But MSMEs who won’t need it in their daily routine, might not register. This is similar to linking Aadhaar with mobile, I didn’t do it unless the government mandated it for Covid vaccination. They would do it once they have to apply for a government scheme,” Jain told Financial Express Online in an interaction.
Importantly, the Reserve Bank of India (RBI) had last year said that existing EMs part II and/or UAMs of MSMEs obtained before June 30, 2020, will continue to remain valid till March 31, 2021, even as they had to register before March under Udyam Registration on or after July 1, 2020. However, now with 33 lakh registrations on the new portal, it isn’t clear that how many of these 33 lakh MSMEs are new enterprises and those that had migrated from EM II and UAM. The government has been so far citing the National Sample Survey (NSS) 73rd round conducted by National Sample Survey Office back in FY16 to report that there are 6.33 crore MSMEs in India.
“This 33-lakh registration might include new MSMEs as well as those who have migrated from previous UAM and EM II registrations while nobody can verify the 6.3 crore number, it is only an estimate that we see. The new registration would tell you the size of the business, geography, sector of business, etc., and which are micro, small, and medium units based on the revised definition,” added Jain.
Meanwhile, there could be reasons for MSMEs not registering on the new portal including poor awareness or simple lack of will if they haven’t faced challenges due to non-registration in their daily activities. Thus the idea for consolidating MSME data in the country through the new portal needs more stringent push by the government in order to map proper planning, structuring, and implementation of its various schemes and record its impact on MSMEs.
“Major issue is the dissipation of knowledge about it among MSMEs on how to go about it. Probably they are not aware of it and on a day-to-day basis, it is not making much of a difference for them. In case there is a provision like you won’t be able to file your balance sheet or apply for your bank loan etc., unless you are registered on this portal, it would help,” said Jain. The new portal is a self-declaration paperless and free-of-cost platform that automatically pulls PAN and GST-linked details on investment in the business during registration since it is integrated with Income Tax and GSTIN systems. MSMEs are given a permanent registration number and a certificate post-registration.