Over 32,000 MSMEs cancelled Udyam registration due to business shutdown since July 2020

The closures so far (32,298) were 0.10 per cent of 3.20 crore MSMEs registered on the Udyam portal, as of December 15.

MSME

32,298 micro, small and medium enterprises (MSMEs) have cancelled their Udyam registration due to the shutdown of their businesses since the launch of the Udyam registration portal on July 1, 2020, till December 8, 2023. According to the data shared in the Lok Sabha by the minister of state in the MSME Ministry Bhanu Pratap Singh Verma in a written reply to a question, 12,611 units cancelled their registration due to business closure as of December 8 in the current fiscal, nearing the FY23 count of 13,290 MSMEs withdrawing their registrations.

6,222 MSMEs in FY22 and 175 MSMEs in FY21 had cancelled their registrations due to shutting down of their businesses.

“Cancellation of Udyam registration can be for multiple reasons including, change of location, and change of business besides closure of business,” said Verma in his reply.

The number of MSMEs closed between July 2021 and March 2023 was 19,248 and the number of people employed in those MSMEs was 1,32,205 as of July 13, 2023. However, during the same period, 45,99,944 new MSMEs were incorporated and registered on the Udyam portal with employment of 2,89,35,351 (2.89 crore), FE Aspire had reported earlier.

The closures so far (32,298) were 0.10 per cent of 3.20 crore MSMEs registered on the Udyam portal, as of December 15.

The maximum cancellations due to business shut down were reported in Maharashtra (8,168), Tamil Nadu (4,221), Gujarat (2,818), Uttar Pradesh (2,807) and others, according to the data shared by Verma.

According to the consolidated data (from the Udyam registration portal and the erstwhile Udyog Aadhaar Memorandum) shared earlier by the government on the number of MSMEs closed over the past six years including the Covid period in the country, 10,067 MSMEs were shut from 2016 to 2022.

While 400 MSMEs (4 per cent of total closures) were closed during the 2016-2019 period as per the UAM data, the majority 96 per cent units — 9,667 were shut between 2019 and 2022, as per both – UAM and Udyam portal data.