Lok Sabha Question No. 1439 (UNSTARRED), answered on 2025-02-13
Subject: Closure of MSMEs
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Smt. Pratima Mondal

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 1439 TO BE ANSWERED ON 13.02.2025

## CLOSURE OF MSMEs

## 1439.   SMT. PRATIMA MONDAL:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) the manner in which the Government justify its policies that have allegedly led to the closure of thousands of MSMEs during the last decade with the reports citing neglect, demonetization, GST issues and an increase in Chinese imports disproportionately affecting small businesses; and
- (b) the concrete steps taken by the Government to ensure fair representation and the implementation of policies that genuinely address the challenges faced by MSMEs, including issues like tax burdens and delayed payments?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SUSHRI SHOBHA KARANDLAJE)

(a) and (b): A revised definition based on the twin criteria of investment and turnover, was adopted to  define  Micro,  Small  and  Medium  Enterprises  (MSMEs)  in  2020  and  for  registration,  Udyam Registration  Portal  was  launched  on  01.07.2020. Udyam registration is  voluntary  and  based  on  self declaration. As per Udyam Registration Portal, enterprises de-register on the portal due to a number of reasons  such  as  change  in  the  company  owner,  certificate  not  required,  duplicate  registration,  shut down of enterprises and other such reasons. The number of MSMEs closed down as a proportion of those which have registered since the revision in the definition is 0.12%.

For providing support to the MSME sector, a series of measures have been undertaken, which inter-alia include schemes such as Prime Minister's Employment Generation Programme for setting up of  new  micro  enterprises  in  the  non-farm  sector  by  providing  Margin  Money  subsidy  on  the  Bank loan, Special Credit Linked Capital Subsidy Scheme with a provision of 25% subsidy to SC/ST MSEs on institutional finance for procurement of Plant & Machinery / Equipment,  Credit Guarantee Scheme for collateral free loans for Micro and Small Enterprises (MSEs), collateral free loans upto Rs 20 Lakh for  Informal  Micro  Enterprises,  PM  Vishwakarma Yojana,  Mudra  Loan, Procurement  &  Marketing Support  Scheme  and  Public  Procurement  Policy  for  MSEs,  2012  Order,  etc.  Under  many  of  these schemes, there are provisions for special incentives to ensure inclusiveness and fair representation.

Rs. 5 lakh crore Emergency Credit Line Guarantee Scheme, for businesses, including MSMEs was operational till 31.03.2023. As per a research report dated 23.01.2023 of the State Bank of India on  Emergency  Credit  Line  Guarantee  Scheme,  almost  14.6  lakh  MSME  accounts,  of  which  about 98.3% of the accounts were in the MSEs categories, were saved from slipping into non-performing asset classification.

As informed by the Office of the Goods & Services Tax Council, Government has undertaken various  initiatives  /  policy  measures  to  address  the  challenges  MSMEs  in  the  country.  No  GST Registration is required for supply of goods upto Rs. 40 lakh and supply of services upto Rs. 20 lakh, etc.

Ministry  of  MSME  launched  SAMADHAAN  Portal  on  30.10.2017  for  monitoring  of  the outstanding  dues  to  the  MSEs  from  the  buyers  of  goods  and  services.  In  addition  Micro  &  Small Enterprises Facilitation Councils (MSEFCs) have been set up in the States/UTs to deal with cases of delayed payments of MSEs. So far, 159 MSEFCs have been set up, with more than one MSEFC set up in  States  like  Delhi,  Jammu  &  Kashmir,  Karnataka,  Kerala,  Maharashtra,  Punjab,  Rajasthan,  Tamil Nadu, Telangana, Uttar Pradesh and West Bengal.

*****