MSME jobs: Workforce at units registered on new Udyam portal in 12 months make up 30% of employment

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September 05, 2021 1:58 PM

Ease of Doing Business for MSMEs: 93 per cent of the registered MSMEs on the new portal were micro enterprises while only 6 per cent (2.21 lakh) were small, and just 1 per cent (28,073) were medium enterprises.

In India, factoring credit makes up for only 2.6% of total formal MSME loans, way below 11.2% in China. Moreover, only 10% of the total receivable market is currently covered under a formal bill discounting mechanism.The government in June this year had given an extension to MSMEs with Entrepreneur Memorandum – II or UAM registrations, which were valid up to March 31, 2021, till this year-end.

Ease of Doing Business for MSMEs: The number of people employed with MSMEs registered on the new Udyam Registration portal — launched in July last year to replace the erstwhile process of filing for Udyog Aadhaar Memorandum (UAM) — now make up 30 per cent of the total employment in the MSME sector. As of June 30, 2021, 35,29,084 MSMEs registered with the new portal had 3,35,90,084 (3.35 crore) people employed, according to the latest government bulletin analysing the Udyam Registration’s data, out of 11.09 crore employed with 6.33 crore MSMEs in India. During the 12-month period, the 35.29 lakh Udyam-registered MSMEs represented only 5.5 per cent of the total MSME base in the country.

93 per cent (32.79 lakh) of the registered MSMEs on the new portal were micro enterprises while only 6 per cent (2.21 lakh) were small, and just 1 per cent (28,073) were medium enterprises. This mirrored bifurcation in the overall base as well. Micro enterprises represented over 99 per cent of 6.33 crore MSMEs while only 0.52 per cent and 0.01 per cent were small and medium enterprises, as per the MSME Ministry’s FY2021 annual report.

The data also showed that in terms of the amount of investment in plant and machinery made by MSMEs registered on the Udyam Registration portal, 92 per cent of MSMEs, which were micro enterprises, had an investment of less than Rs 25 lakh. Moreover, 85 per cent of registered MSME had a turnover of only up to Rs 1 crore. With respect to the sectoral distribution, the highest numbers of registered MSMEs were involved in the manufacturing of food products, food and beverage service activities, land transport, other personal service activities.

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Importantly, the government in June this year had given an extension to MSMEs with Entrepreneur Memorandum – II or UAM registrations, which were valid up to March 31, 2021, till this year-end. The Reserve Bank of India (RBI) had said last year that existing EMs II and/or UAMs of MSMEs obtained before June 30, 2020, will continue to remain valid till March 31, 2021, even as MSMEs had to register on the Udyam Registration portal before March this year.

Earlier, small-scale industrial units had to register themselves with the District Industries Centres (DICs) before the MSME Development Act, 2006, came into effect. Later under the provisions of the act, entrepreneurs had to file EM-I at DICs before setting up the MSME and EM-II after beginning the production work. Between 2007-2015, there were 21,96,902 EM-II filings, and between September 2015 and June 30, 2020, there were 1,02,32,451 (1.02 crore) UAM registrations, according to the MSME Ministry’s annual report 2020-21.

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