Udyam is an online system for registering micro, small and medium enterprises launched by the Union MSME Ministry on July 1, 2020. The government had also revised the definition of MSMEs from the same date. More than 88 lakh MSMEs have successfully registered themselves to date through the Udyam registration portal.
Any person can avail a free Udyam registration for their enterprise through a fully digital and paperless process based on self-declaration. Udyam registration is a prerequisite for availing the benefits of schemes or programmes of the Ministry of Micro, Small & Medium Enterprises such as Credit Guarantee Scheme, public procurement policy, additional edge in Government Tenders and protection against delayed payments etc.
An e-certificate called the “Udyam Registration Certificate” is issued online on completion of the registration process. This certificate has a dynamic QR Code through which the web page of the registration portal and details about the enterprise can be accessed.
Aadhaar, PAN and GST numbers are required for registration. The Udyam portal is seamlessly integrated with Income Tax and GST Identification systems along with the government e-marketplace. The details on investment and turnover are taken automatically from government databases.
The Aadhaar number shall be of the proprietor in the case of a proprietorship firm, of the managing partner in the case of a partnership firm and of a ‘karta’ in the case of a Hindu Undivided Family.
In case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust, the organisation or its authorised signatory shall provide its GSTIN and PAN along with the Aadhaar number.
Misrepresents or attempts to suppress the self-declared facts and figures appearing in the Udyam Registration or updation process is liable to penalty under section 27 of the Micro, Small and Medium Enterprises Development Act, 2006.
No enterprise is allowed to file for more than one Udyam Registration. However, any number of activities including manufacturing or service or both may be specified or added in one registration.
The registration is permanent and acts as the basic identification number for an enterprise and there will be no need for renewal of registration.
MSMEs also become eligible for priority sector lending from banks. All bank loans to MSMEs conforming to the RBI guidelines qualify for classification under priority sector lending.
The Finance Ministry on Wednesday expanded the scope of the Rs 5 lakh-crore Emergency Credit Line Guarantee Scheme (ECLGS) to support MSMEs engaged in travel, tourism and hospitality sectors to overcome the impact of the COVID-19 pandemic impact.
The coverage, scope and extent of benefits under ECLGS 3.0 pertaining to hospitality, travel, tourism and civil aviation sectors have been expanded, the ministry said in a statement.
Finance Minister Nirmala Sitharaman while announcing the Budget 2022-23 had extended the validity of the scheme by another one year till March 2023, and also increased the total amount to be sanctioned under the scheme from Rs 4.5 lakh crore to Rs 5 lakh crore.
As per the latest modification, new borrowers, in the sectors covered under ECLGS 3.0, who have borrowed between March 31, 2021, and January 31, 2022, will now be eligible to avail the emergency credit facilities.
Also, the credit limit for eligible borrowers has been increased to 50 per cent of their fund-based credit outstanding from 40 per cent earlier.
"Eligible borrowers in all such sectors (other than the civil aviation sector) are now permitted to avail up to 50 per cent of their highest fund-based credit outstanding on any of three reference dates (Feburary 29, 2020, March 31, 2021 and January 31, 2022), as against the earlier limit of 40 per cent of the higher of their fund-based outstanding on either of two reference dates (February 29, 2020 and March 31, 2021)," the ministry said.
The enhanced limit is subject to a maximum of Rs 200 crore per borrower, it added.
Individuals and proprietary concerns in the sectors covered under ECLGS 3.0 can also now avail of emergency credit facilities.
The fresh modifications are aimed at enabling businesses in these contact-intensive sectors to get further support through enhanced coverage and collateral-free liquidity on capped interest rates/fees, it said.
Keeping in view the high proportion of non-fund based credit in the overall credit of the civil aviation sector, the ministry said, eligible borrowers in the civil aviation sector are now permitted to avail of non-fund based emergency credit facilities as well under ECLGS 3.0.
As against the earlier limit of availing up to 40 per cent of their fund-based outstanding, borrowers can now avail up to 50 per cent of their highest total fund and non-fund based credit outstanding.
Further, to lower their cost of accessing non-fund-based credit, bank guarantees, letters of credit and other non-fund based facilities sanctioned under ECLGS 3.0 will be issued without any cash margin and subject to a cap of 0.5 per cent per annum on the fee/commission, it said.
Since its launch in May 2020, loans worth Rs 3.19 lakh crore has been sanction till March 25, 2022. About 95 per cent of the guarantees issued are for loans sanctioned to micro, small and medium enterprises.
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