Ease of doing business for MSMEs: The shutdowns, however, make up for a minuscule share of the total MSMEs registered on the two portals – Udyam and UAM.
Ease of doing business for MSMEs: 15,029 MSMEs were shut down between the financial year 2019-20 and mid-December in the current fiscal, according to the data shared by Minister of State for MSMEs Bhanu Pratap Singh Verma on Monday in a written reply to a question in the Rajya Sabha. Data post July 1, 2020 was sourced from the Udyam portal while for the previous years (till June 30, 2020), the data was sourced from Udyog Aadhaar Memorandum (UAM) – the erstwhile MSME registration portal.
According to the details shared in the parliament, 8,232 – 54 per cent of total shutdowns were closed till December 14 in the current financial year itself followed by 6,222 units – 41 per cent closed in FY21. In contrast, the rest 575 units or 3.82 per cent of total closures were shut between FY20 and FY21 (245 in FY20, 155 in FY21 and 330 in FY22).
In terms of portal wise, 14,629 units or 97 per cent of the total shutdowns (including 175 MSMEs closure between July 1 and March 30 in FY21 apart from 6,222 units shutdowns in FY22 and 8,232 shutdowns till mid-December in the current fiscal) were registered on Udyam portal in comparison to 400 units or 2.66 per cent of total shutdowns registered on the UAM portal.
The shutdowns, however, make up for a minuscule share of the total MSMEs registered on the two portals. While 14,629 Udyam units shut constituted only 0.11 per cent of nearly 1.28 crore MSMEs registered on the Udyam portal at the time of filing this report, the 400 UAM units shut represented just 0.004 per cent of the 1.02 crore UAM units registered between September 2015 and June 2020. The data on total UAM registrations was published in the MSME ministry’s FY21 annual report.
The reasons for closures were not stated in Verma’s reply. “Factors contributing to shutdown are not captured on Udyam Registration Portal,” he said.
“Closure of MSMEs is certainly a concern for the government for which necessary steps and studies have been undertaken. Closure is one of the reasons cited by units for cancelling their MSME registrations, but the reason for closure is not always mentioned by them. Other reasons for cancelling registrations include stopping the manufacturing of goods or moving to other businesses or they just don’t need the registration anymore,” Ishita Ganguli Tripathy, Additional Development Commissioner, Ministry of MSME had told FE Aspire.