Centre plans big boost for MSMEs with an inter-ministry data bank

What is the News?

The Central Government is working towards building a robust data bank for Micro, Small and Medium Enterprises(MSMEs) by integrating information across various ministries and government data.

What is the Government trying to do for MSMEs?

• The Ministry of MSME is in talks with government departments so that more businesses are registered as MSME.
• For this, it has requested ministries to accept Udyam registration as the formal identity for their schemes.
• This will allow Udyam registration number to act as a common business number. This number can be used across ministries.
• For instance, there are schemes that aim to support enterprises in rural areas that fall under the ambit of the ministry of rural development.
• Linking an enterprise’s Udyam registration number can help the government analyse the kind of business and its need.
• As of now, the ministries of rural development and tourism have accepted the Ministry of MSME proposal.

What was the need for this step?

• MSMEs are considered to be the backbone of the economy, accounting for 30% of the country’s gross domestic product(GDP).
• However, the lack of adequate statistics on MSMEs has been one of the key challenges for the government.
• Experts believe it is important to identify who the real MSMEs are, as there is no reliable data available for small businesses.
• Hence, integrating data with other ministries will help the government frame stronger schemes to come up with a better methodology. They will be able to reach out and support businesses and bring more MSMEs under the formal sector.

Udyam Portal:

• Udyam registration portal was launched in 2020. It is an online self-declaration process for MSMEs.
• It simplifies the process of registering for any enterprise under the MSME category for them to avail benefits under various government schemes.
• Also, it is already integrated with the Central Board of Direct Taxes (CBDT), Goods and Services Tax Network(GSTN) as well as the government e-marketplace(GeM).
• As of July 2021, over 3.8 million MSMEs have registered on the Udyam portal.