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Over 6,000 MSMEs registered on Udyam portal shut during FY22: MSME Ministry

Ease of doing business for MSMEs: “The closures constitutes 0.0004 per cent of the total MSMEs registered on the portal,” said Bhanu Pratap Singh Verma.

Ease of doing business for MSMEs: Out of 1.38 crore enterprises registered on the MSME ministry’s Udyam registration portal since its launch on July 1, 2020, till January 30, 2023, 6,222 crore MSMEs have shut down business during the financial year 2021-22, said minister of state for MSMEs Bhanu Pratap Singh Verma in a written reply to a question in the Lok Sabha on Thursday. This constitutes 0.0004 per cent of the total MSMEs registered on the portal, the minister said. 

Sharing the data on MSMEs shut between FY20 and mid-December 2022, Verma informed Parliament during last year’s winter session that 15,029 MSMEs were shut during the period. 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. 8,232 – 54 per cent of the total shutdowns were closed till December 14 in the current financial year itself

Verma, however, hadn’t cited reasons for the closure. “Factors contributing to shutdown are not captured on Udyam Registration Portal.” 

“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 earlier told FE Aspire. 

Nonetheless, over a larger period, between 2016 and 2022, according to the combined data from the Udyam registration portal and UAM, 10,067 MSMEs were shut, Verma informed Parliament in July last year. Majority 96 per cent units — 9,667 were shut between 2019 and 2022, according to the UAM and Udyam portal data.