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MSME Udyam Registrations: Cancellations and Business Shutdowns

As of December 8, 2023, a total of 32,298 Micro, Small, and Medium Enterprises (MSMEs) have cancelled their Udyam registration due to business shutdowns since the launch of the Udyam registration portal on July 1, 2020. This accounts for 0.10% of the 3.20 crore MSMEs registered on the Udyam portal. In the current fiscal year, 12,611 units cancelled their registration due to business closure, nearing the FY23 count of 13,290 MSMEs withdrawing their registrations.

Reasons for Udyam Registration Cancellations

Cancellation of Udyam registration can occur for various reasons, including changes in location, changes in business operations, and business closures, according to the Minister of State in the MSME Ministry, Bhanu Pratap Singh Verma.

Regional Breakdown and Maximum Cancellations

The data reveals that Maharashtra reported the highest number of cancellations due to business shutdowns (8,168), followed by Tamil Nadu (4,221), Gujarat (2,818), Uttar Pradesh (2,807), and other states.

Employment Impact and New Registrations

Between July 2021 and March 2023, 19,248 MSMEs closed, impacting 1,32,205 employees. However, during the same period, 45,99,944 new MSMEs were incorporated and registered on the Udyam portal, with employment for 2,89,35,351 (2.89 crore) individuals.

Historical MSME Closures

In the past six years, including the Covid period, a total of 10,067 MSMEs were closed, with 4% shutting down from 2016 to 2019 and the majority (96%) between 2019 and 2022, according to consolidated data from the Udyam registration portal and the erstwhile Udyog Aadhaar Memorandum.


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