The concept behind introducing UDYAM Registration was to simplify the procedural format to register their business under Micro Small Medium Enterprise or MSME.
UDYAM Registration is also known as MSME Registration, a government registration that is provided along with a recognition certificate & a unique number. This is to certify small/medium businesses or enterprises.
The new procedure for registration of micro, small and medium enterprises (MSMEs) in the name of UDYAM Registration began on 1 July 2020.
The main purpose behind the launch of this facility was to offer a way to the government to provide the maximum benefits to MSME industries in India, who are registered via MSME through their Aadhar Card Number.
The owner or proprietor of the entity will need to provide his/her Aadhar Number. This is a compulsory guideline whether the enterprise or entity is a sole proprietor, an LLP, a Private limited company, or anything else should have the recognition certificate provided through the MSME registration process.
New Definition of MSMEs
As part of the COVID-19 relief package named ‘Atmanirbhar Bharat,‘ the definition of MSMEs has changed. Now the classification is not only based on investment but also based on turnover of the firm.
As per the new definition, there will be no more distinction between Manufacturing and Service MSMEs. Let us have a look of new definition of MSME.
Micro units: Investment < Rs 1Cr and turnover < 5Cr
Small units: Investment < Rs 10Cr and turnover < 50Cr
Medium units: Investment < Rs 50Cr and turnover < 250Cr
UDYAM Registration Benefits: –
By registering in the UDYAM, the business gets benefits such as:
Benefits from banks: All banks & other financial institutions give priority to MSMEs and make special plans for them. This usually includes priority sector lending, which means your business can easily get a loan and incur lower bank interest rates. You may also get a stay in case of a delay in repayment.
Tax benefits: Depending on your industry, you may get the benefit of the Excise Exemption Scheme or you may get a direct tax exemption in the initial years.
Benefits of the State Governments: The State Government gives subsidy on electricity, tax and entry to the businesses which are associated with the industry base and the State Government gives them exemption in sales tax and purchase preference for the goods left by them.
Benefit from the Central Government: The central government has introduced many schemes like
- Credit Guarantee Scheme,
- Atmanirbhar Bharat,
- Zero Effect Zero Defect,
- Quality Management Standards and Quality Technology Tools
- Women Entrepreneur etc
These all for the purpose to benefit the MSME sector. Central and State Government Extended Credit Facilities.
Industrial extension support and services, availability of developed sites for warehouse construction, provision of training facilities, assistance in marketing both in and outside the country (exports), assistance for building industries in under developed areas, for technology development in MSMEs Technical consultancy, capital support, and so on.
By creating and providing UDYAM platform and redefining MSME, government has made every effort to make India “Atmanirbhar”. Launched numerous schemes and services which will give a thrust to business of Small and Medium Entrepreneurs. Atmanirbhar Bharat is not only to fulfil the country’s requirement but also make our products and services competitive in Global Market in terms of quality. In other words, the vision of Atmanirbhar Bharat is not only to take care of our own country’s need by locally produced Goods and Services provided, but also to increase demand for our goods and services by improving standard of our goods produced and services provided in Global Market.