Why 73,576 MSMEs have cancelled their Udyam licenses? Check here

Ease of doing business for MSMEs: As many as 73,576 MSMEs registered on the Udyam portal have cancelled their Udyam registrations as of March 29 this year since the launch of the portal on July 1, 2020. The reasons cited for withdrawal or cancellation of Udyam registrations, according to the data shared in the Rajya Sabha by the minister of state in the MSME ministry Bhanu Pratap Singh Verma, were business shutdown, change of owner, not required further, duplicity, and others.

Data showed that 11,621 licenses were cancelled because enterprises didn’t require it anymore while 19,520 licenses were cancelled due to the closure of businesses. Further, 8,484 licenses were withdrawn due to the change of owner in the business, 2,679 were withdrawn due to duplicity and 31,272 were withdrawn for other reasons.

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Overall, the states with the highest Udyam withdrawals were Maharashtra with 17,574 licenses withdrawn followed by Tamil Nadu (6,570 withdrawals), Uttar Pradesh (6,265 withdrawals), Gujarat (6,115 withdrawals), Rajasthan (5,260 withdrawals), and more, data showed. 

However, the total cancellation count was only 0.43 per cent of 1.67 crore MSMEs registered on the Udyam portal at the time of filing this article, as per data from the portal.  

“The withdrawals are not very significant if we look at the total registration count. Maybe MSMEs didn’t see significant benefits from the portal as unless one is doing business with the government or raising bank credit at a lower interest rate, there aren’t many benefits from the registration,” Ashok Saigal, MD, Frontier Technologies and Co-chairman, CII National MSME Council had told FE Aspire.

Also read: MSMEs withdraw registration from Modi govt’s Udyam portal; business shutdown among key reasons

Out of 1.67 crore Udyam registrations so far, 1.61 crore were micro enterprises, 4.56 lakh were small enterprises and 40,865 were medium units. The total count included registrations from the Udyam Assist Platform launched in January by the government to help informal micro units get the Udyam certificate. The total registration via the assist platform was 13.32 lakh.