Over 49,000 MSMEs Closed Operations Since 2020, Resulting In Almost 3 Lakh Job Losses

New Delhi, Jul 27 (KNN) In a written statement to the Lok Sabha on Thursday, MSME Minister Jitan Ram Manjhi reported that 49,342 micro, small, and medium enterprises (MSMEs) have ceased operations since the launch of the Udyam registration portal on July 1, 2020.

This figure represents a mere 0.17 per cent of the 2.76 crore MSMEs registered on the platform.

The closures resulted in a total job loss of 3,17,641. Minister Manjhi attributed these shutdowns to various factors, including changes in company ownership, redundant certifications, duplicate registrations, and other administrative reasons.

Despite these closures, the MSME sector has shown significant growth. Recent data indicates that Udyam-registered MSMEs have surpassed the 20-crore job milestone, with 4.77 crore MSMEs reporting a total of 20.61 crore jobs at the time of this report.

State-wise analysis reveals Maharashtra leading in MSME closures with 12,233 units, followed by Tamil Nadu, Gujarat, and Rajasthan.

The financial year 2022-23 saw the highest number of closures at 13,290 units, compared to 6,222 in FY22 and 175 in FY21.

While the government does not maintain data on temporary or permanent job losses in the MSME sector, available figures show 19,862 jobs were lost in FY21 and 42,662 in FY22.

The Department of Economic Affairs (DEA) under the Finance Ministry reported in February that employment in Udyam MSMEs has increased 5.3 times since the portal's launch.

The DEA attributes this growth to the revised MSME definition, which has facilitated ease of doing business and promoted investment.

Additionally, the Emergency Credit Line Guarantee Scheme (ECLGS) has helped alleviate liquidity issues for MSMEs, contributing to a reduction in Non-Performing Assets (NPAs).

This data suggests that while some MSMEs have faced challenges, the sector as a whole continues to demonstrate resilience and growth, playing a crucial role in India's economic landscape.

(KNN Bureau)