Number of MSMEs closed in FY23 so far surpasses total closures during 2016-2022: Govt data

Technology for MSMEs: The number of closures till early February this fiscal was 0.59 per cent of over 18 lakh new MSMEs launched during the year while for FY22, it was 0.28 per cent with 21.72 lakh new MSMEs.

February 13, 2023 13:52 IST

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6,222 Udyam MSMEs were shut in FY22 with 42,662 people losing their jobs,

Technology for MSMEs: The number of Udyam-registered MSMEs closed in the current financial year has jumped from 2,870 as of mid-July and 8,000 in the first week of December to 10,729 till February 3 against 18.04 lakh new enterprises incorporated this fiscal, the official data showed. In comparison, 10,067 MSMEs were shut between 2016 and 2022 including 400 MSMEs shut during the 2016-2019 period as per the Udyam Aadhaar Memorandum (erstwhile portal for MSME registration) data, while the majority 9,667 units shut between 2019 and 2022, as per both – UAM and Udyam portal data.

6,222 Udyam MSMEs were shut in FY22 with 42,662 people losing their jobs and from July 1, 2020 (when the Udyam portal was launched) till March 31, 2021, 175 units were closed with 724 jobs lost.

Also read: Over 15,000 MSMEs shut since FY20; 54% in current fiscal so far: Govt data

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The data for the corresponding years was shared by the minister of state for MSMEs Bhanu Pratap Singh Verma in the Parliament.

The closure of over 10,000 MSMEs so far in the current fiscal, higher than the total number of shutdowns during the 2016-2022 period indicated growth concerns post-pandemic faced by MSMEs even as several schemes and measures were announced by the government.

The number of closures till early February this fiscal was 0.59 per cent of over 18 lakh new MSMEs launched during the year while for FY22, it was 0.28 per cent with 21.72 lakh new MSMEs.

Importantly, the number of MSMEs withdrawing their Udyam registrations for several reasons including business shutdown was higher at 55,603 MSMEs as of December 14 since July 2020. Out of the total withdrawal count, 55 per cent or 30,597 units cancelled their registrations in the current fiscal year itself till mid-December followed by 43 per cent or 24,075 units cancelling their registrations in FY22 and 1.6 per cent or 931 units of total withdrawals recorded in FY21 (July 1, 2020 – March 30, 2021).

Also read: 67% MSMEs were temporarily shut, profits dipped for 66% in FY21: SIDBI survey

Shutting down businesses was the key reason for 9,141 enterprises cancelling their registrations while 5,510 enterprises withdrew their registrations because they didn’t require it any further. Moreover, 3,911 registrations were revoked due to the ‘change of owner’ in the business. Lastly, 15,597 enterprises had cancelled their licenses due to ‘other’ reasons, as per the data shared in July 2022 in the Parliament.