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Nearly 25,000 units in the micro, small and medium enterprise (MSME) segment in the country closed their operations in the past three years — the post-COVID period — according to information in a reply given by Bhanu Pratap Singh Verma, Union Minister of State for MSMEs in the Rajya Sabha.
As per Udyam Registration Portal, the total number of MSMEs shut down between July 1, 2020, and July 18, 2023, stood at 24,839.
However, the last fiscal FY23 saw the highest number of shutdowns in the MSME segment – 13,290 Udyam-registered MSMEs downed their shutters when compared with 6,222 units that had wound up their operations in FY22 and 175 units in FY21. In the current fiscal (as of July 18), 5,152 units shut down their operations.
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Maharashtra and Tamil Nadu accounted for the highest number of MSME shutdowns during this period. In Maharashtra, 6,317 MSME units closed their operations during the past three years. In FY22 alone, 3,276 MSMEs downed their shutters.
Tamil Nadu reported the closure of 3,158 Udyam-registered MSMEs in the past three years and in FY22, 1,900 units had wound up their operations. Uttar Pradesh and Gujarat saw the closure of 2,123 and 2,292 units respectively in the past three years.
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Of course, all the four States together accounted for 45 per cent of the total number of MSMEs registered on the Udyam Registration Portal since inception. As of July 18, 2023, the total number of MSMEs registered on Udaym portal was 1,75,62,223 units.
While FY23 saw the highest number of MSME shutdowns in the past three years, the year also saw the highest number of MSME registrations on the Udyam portal. In FY23, 72,55,873 units got registered on the portal when compared with 51,50,422 units in FY22 and 28,49,158 units in FY21. In this fiscal (as of July 18), 23,06,770 MSMEs got registered on the portal.
Among the Indian States, Maharashtra, Tamil Nadu and Gujarat accounted for the highest credit outstanding to the MSME sector by scheduled commercial banks. Credit outstanding to MSMEs in Maharashtra stood at ₹3.8 lakh crore as of March 31, 2023, while the amount was ₹2.39 lakh crore for Tamil Nadu and ₹2.11 lakh crore for Gujarat.
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