Ease of Doing Business for MSMEs: The Narendra Modi government’s new MSME registration portal Udyam Registration, which was launched last year following the revision in the MSME definition, had registered 38,20,598 enterprises between July 1, 2020, and July 26, 2021, the majority of which operated in the service sector. While 36 per cent (13,82,541 MSMEs) were in the manufacturing sector, 63.8 per cent (24,38,061 MSMEs) were service enterprises, according to the data shared by the MSME Minister Narayan Rane in the Rajya Sabha recently. The portal was launched on July 1, 2021. As per the ministry’s FY21 annual report, there were an estimated 6.33 crore MSMEs in the country, 36 per cent of which were involved in trade, 33 per cent in other services, and 31 per cent in manufacturing.
“On 1st July, 2020, after the adoption of new definition of MSMEs, a new registration portal ‘Udyam Registration’ has been launched by Ministry of MSME and so far, 38,20,598 classified MSMEs are registered on the portal in All India (from 01.07.2020 to 26.07.2021),” the minister had informed Parliament. Within service MSMEs, 95 per cent (23.23 lakh) registered onto the Udyam Registration portal were micro units while only 0.44 per cent (10,845) were medium enterprises. Likewise, 89 per cent (12.31 lakh) enterprises in the manufacturing sector were micro firms while only 1.33 per cent (18,390) were medium-sized manufacturers.
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The digital portal is a self-declaration paperless and free-of-cost platform for MSMEs to register their businesses without any documents or proof except the Aadhaar number of the registration, according to the portal. Small scale industrial enterprises had to register 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 Entrepreneur Memorandum (EM) part-I at DICs before setting up the MSME and EM-II after beginning the production work. Between 2007-15, 21,96,902 EM-II filings were recorded and between September 2015 and June 30 2020 1,02,32,451 (1.02 crore), MSME registrations were done on the e-filing system under Udyog Aadhar Memorandum (UAM), as per the ministry’s annual report. UAM was replaced by Udyam Registration.
Recently, after the government had announced reinstating retail and wholesale trades under MSME classification, the Reserve Bank of India (RBI) had last month written to banks to include the two for priority sector lending. RBI also informed all banks that such businesses engaged in retail and wholesale trade would be allowed to register on Udyam Registration portal, as announced by the government.