Crossing the 1 crore milestone in just 2 years since the launch of the Udyog digital portal on July 1, 2020 for MSME registration will be a big step towards the growth and organisation of the sector. Currently there are over 96 lakhs new or existing businesses registered as MSMEs on the Udyog portal. In May 2022, the Ministry of Small, Medium and Micro Enterprises announced that all Udyog Aadhaar have to be upgraded to Udyam Registration by June 30, 2022 for free. The Udyog Aadhaar will be only valid till the date mentioned above and MSMEs will not get the benefits and incentives from the Government schemes with an invalid registration.
Udyog Aadhaar is a simplified, digital version of a system which requires the MSMEs to provide documents and details about their business. This system has a one-page registration process which requires a self-declaration format under which the MSMEs will self-certify their existence along with other documentation of the particular business enterprise. By doing this MSMEs gain benefits and incentives from the Government of India. for their businesses.
Individuals having an Aadhaar number can register through the online portal. However, those who do not have Aadhaar number can register offline, in paper format with the General Manager of the particular District Industries Center (DIC). The persons registering online with Aadhaar number will have to further provide the demographic details as well as biometric details, and can benefit from the ease of registration on the Udyog portal.
As per the UIDAI data, some of the states have less than adequate coverage. For states, such as Assam the registration process through offline mode for filling of UAM with the General Manager (DIC) process could be restored to. For the States/UTs whose offices are in the districts headed by the General Manager (DIC) it is not a mandatory requirement to have an Aadhaar number as their primary role is to promote and encourage industries in the district by providing facilities. For a proactive role in Udyog Aadhaar, the States/UTs have been asked to sensitise their DIC.
Earlier there was an Entrepreneurs Memorandum system where they filled registration with the general manager (DIC) and it was a diverse system. Where some states had their own online system, some were using the national portal created by the Ministry of MSMEs and some continued with paper format for registering MSMEs. Whereas the new system is a common portal for all MSMEs and has assured ease of doing business. This portal has appropriate provisions for sharing State/District explicit information of registration under Udyog Aadhaar with separate States/Districts respectively. This procedure is likely to save cost in the long run as the States/UTs do not have to maintain the same records.
Most of the enterprises in India have not registered due to the long paperwork process hence do not benefit from the government schemes. The KV Kamath panel suggested that the registration should be universalised upon financing the MSME sector which has given many job opportunities lately. To ensure wider coverage of MSMEs this system originated so that there is ease in the process of registration and MSMEs can further benefit from various schemes of the central or state government.
With the replacement of the old system things have changed, where many MSMEs have registered as the process is simpler thereby gaining big advantages for their businesses. This system has created awareness for small business entrepreneurs and has provided various schemes from which they benefit. By registering it helps in cost reduction of getting a patent done or to setting up the enterprise.
Kinara Capital is a rapidly growing fintech and an RBI registered Systemically Important NBFC in India which continuously aims to encourage and empower entrepreneurs by supporting the growth of their businesses. Kinara Capital provides MSME loans without any collateral to small business entrepreneurs in India. Availing business loans has become an easier process via the Udyam Registered number. Check your loan eligibility in just 1 minute through the myKinara app. By providing minimum documentation and Udyam registration details you can go from decision to disbursement within 24 hours.