In a developing nation such as India, MSMEs (Micro, Small, and Medium Enterprises) are essentially the backbone of the country. Not only do they give mass employment to people, but they also generate the country’s GDP to a great extent. Small and medium-scale industries are now reliant on crores of individuals in India. The government has made Udyam Registration compulsory in order to provide formal recognition and a proper base to the MSME sector.
In this article, we will see in detail why Udyam Registration is required and how it results in the growth of a robust MSME sector.
The Role of the MSME Sector in India
The Indian MSME sector employs more than 110 million individuals and contributes around 30% of the GDP of the country. They also contribute around 45% of the export. Small firms, despite such a huge contribution, didn’t have an organized identification system earlier.
This is where Udyam Registration was born. Not only does it give businesses an identity, but it also links them to a series of schemes run by the government.Â
What is Udyam Registration?
Udyam Registration is a digital certificate provided by the government to MSMEs. Small, medium, or micro enterprises can register online using their Aadhaar and other documents. Once registered, the company is allotted a Udyam Registration Number (URN) and a Udyam Certificate.
The certificate will be the business’s identity, which will be accepted by the government, banks, and other organizations.
Advantages of Udyam Registration for MSMEs
Easy Loans and Financial Support
Banks and NBFCs do not readily provide loans to small businesses. But once Udyam is registered, MSMEs can readily access collateral-free loans, loans with reduced interest rates, and other credit schemes.
Access to Government Scheme
The Government of India operates various schemes for MSMEs, including subsidies, tax concessions, technology upgradation schemes, etc. Under Udyam registration, no enterprise can access these schemes.
Priority in Government Tenders
Udyam-registered MSMEs also enjoy priority access to the Government e-Marketplace (GeM) and tenders. Therefore, they can easily reach new customers and markets.
Delayed Payment Protection
According to the MSME Development Act, Udyam-registered establishments are entitled to get the amount and interest if payments are delayed from large industries.
International Market Access
Udyam registration provides a legal identity to MSMEs, which can enable them to export without any restrictions and win over the confidence of overseas buyers.
Institutionalization of the MSME Sector
Most small-scale enterprises in India remain informal in nature. They are not registered in the tax system and cannot benefit from government schemes.
Udyam Registration bridged this gap. Now, it is easy for any entrepreneur to become online registered and become a member of the formal economy. Not only has this made things more transparent, but it has also given the government actual information on the MSME sector.
Digital India and Easy Process
In the past, the MSME registration process was long and laborious. But today, with the Udyam Registration Portal, the entire process is online.
- Aadhaar and PAN only.
- No documents to be uploaded.
- The Udyam Certificate can be downloaded online.
- It has saved small business owners a significant amount of money and time.
Long-Term Benefits to the MSME Sector
Udyam Registration is not a ritual but a future investment for MSMEs. Some of the long-term advantages are:
- The company becomes reliable.
- Better relationship with banks and investors.
- Facilitating business expansion and the incorporation of new technologies.
- Easy access to local, national, and global markets.
Contribution to Self-Reliant India
The MSME industry is at the center of Prime Minister Narendra Modi’s vision of a self-reliant India.
Udyam Registration not only provided MSMEs with legal existence but also made them self-sufficient. Indian small businesses are today shaping their identity in the world via digital solutions and government schemes.
You Can Apply for Udyam Annexure Download Through Udyam Portal
Conclusion
The MSME sector is still a strength of Indian economic dominance. But without legal existence and government sponsorship, for the upgradation of this sector, it is not possible.
Udyam Registration has bestowed this resilience on MSMEs. It not only gives the businesses the backing of the government and finances, but also allows them to compete within the nation and abroad.
Thus, if you own a micro, small, or medium business, procure Udyam registration immediately. This is the beginning of your business’s real identity and growth.
