MSME registrations: For small units, Bihar & UP enroll in big numbers

The Ministry of Micro Small and Medium Enterprises, on September 18, 2015, had notified that every MSME unit had to fill Udyog Aadhaar Memorandums (UAM) online, a move to simplify the registration procedure for entrepreneurs and promote ease of doing business as the UAM replaces the current practice of filing of voluminous duel set Entrepreneurs’ Memorandum (EM) with the respective states. The incentive for entrepreneurs to register is that the registration of a unit entitles them to avail of possible benefits of government schemes, something that is not available to those not registered.

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In Bihar, the highest number of registrations have come in from the West Champaran district (40,382), followed by Muzaffarpur (22,353) and Patna (15,881). In case of Uttar Pradesh, the highest number of registrations came in from Agra (19,836) and Ghazipur (11,570), even as the traditional industrial districts of Gautam Buddha Nagar (with 3,915 registrations) and Ghaziabad (2,358) were way down in the pecking order, officials involved in the exercise told The Indian Express. In Bihar, the registrations have come in from units involved in the manufacture and processing of sugar, sugar mill machines, cotton yarn and staple yarn products and wheat products. Uttar Pradesh has a substantial number of registration requests coming in from the sugar sector.

Under the new UAM scheme, the cumbersome filing of EM has now been dispensed with and the entrepreneurs in the MSME sector just need to file a simple one-page memorandum to instantly get a unique Udyog Aadhaar Number (UAN). The information sought is on self-certification basis and no supporting documents are required at the time of online filing of UAM. The UAM can be filed online by individuals themselves in case they have an Aadhaar Number. However, in all exceptional cases, including those of not having an Aadhaar Number, the UAM can be filed in offline mode (in paper form), with the general manager of the concerned District Industries Centre.

The UAM, as a concept, emerged from the recommendations for Universalisation of Registration in the Report of the Kamath Committee on Financial Architecture of MSME sector. The filing includes the one-page memorandum in a self declaration format under which the MSME will self certify its existence, bank accounts details, promoter or owner Aadhaar details, other minimum basic information etc., creation of a business friendly environment with easy entry procedures to encourage entrepreneurial activity for setting up new unit.

Apart from fact that the larger industrialised states have seen tepid response from MSME units, the registrations have not picked up in smaller, hill and remote states.