Lok Sabha Question No. 271 (STARRED), answered on 2025-08-07
Subject: Closure of MSME Units
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Brijendra Singh Ola

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA STARRED QUESTION NO.*271 TO BE ANSWERED ON: 07.08.2025

## CLOSURE OF MSME UNITS

| *271.                                                                         | SHRI BRIJENDRA SINGH OLA:                                                                                                                            |
|-------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state: | Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:                                                                        |
| (a) years                                                                     | whether it is a fact that a large number of MSME units have closed down during the last few and if so, the details thereof and the reasons therefor; |
| (b) and if                                                                    | whether the policies of the Government are responsible for the closure of these MSME units so, the details thereof;                                  |
| (c) units                                                                     | whether the Government is formulating any schemes or taking any steps to revive these MSME and if so, the details thereof; and                       |
| (d)                                                                           | if not, the reasons therefor?                                                                                                                        |
| ANSWER                                                                        | ANSWER                                                                                                                                               |
| MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI JITAN RAMMANJHI)        | MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI JITAN RAMMANJHI)                                                                               |
| (a) to (d): A statement is laid on the Table of the House.                    | (a) to (d): A statement is laid on the Table of the House.                                                                                           |

## STATEMENT  REFERRED  TO  IN  REPLY  TO  LOK  SABHA  STARRED  QUESTION  NO. *271 FOR 07.08.2025 REGARDING "CLOSURE OF MSME UNITS".

(a) and (b): In  the  last  five  years,  since  01.07.2020,    6.62  crore  enterprises  have  registered  on Udyam / Udyam Assist Platform of Ministry of MSME. The year-wise details of enterprises shutdown is given below:

| Financial Year                           | 2020-21                                  | 2021-22                                  | 2022-23                                  | 2023-24                                  | 2024-25                                  | 2025-26 (01.04.2025 to 28.07.2025)       | Total                                    |
|------------------------------------------|------------------------------------------|------------------------------------------|------------------------------------------|------------------------------------------|------------------------------------------|------------------------------------------|------------------------------------------|
| Enterprises Registered                   | 28,29,746                                | 51,22,829                                | 85,47,152                                | 2,48,93,528                              | 2,06,55,273                              | 42,08,995                                | 6,62,57,523                              |
| Enterprises Shut Down                    | 175                                      | 6,222                                    | 13,290                                   | 19,828                                   | 39,446                                   | 20,029                                   | 98,990                                   |
| Report Source: Udyam Registration Portal | Report Source: Udyam Registration Portal | Report Source: Udyam Registration Portal | Report Source: Udyam Registration Portal | Report Source: Udyam Registration Portal | Report Source: Udyam Registration Portal | Report Source: Udyam Registration Portal | Report Source: Udyam Registration Portal |

There are various reasons for an enterprise to deregister such as change in the company owner, certificate  not  required,  duplicate  registration,  shut  down  of  enterprise  and  others.  As  per  Udyam Portal, the number of MSMEs shut down as a proportion of the total those which have registered since the revision in the definition on 01.07.2020 is only 0.15%.

(c) and (d): The Central Government supplements the efforts of the State/UT Governments through various  schemes,  programmes  and  policy  initiatives  for  overall  development  and  promotion  of MSMEs such as Prime Minister's Employment Generation Programme, Credit Guarantee Scheme for Micro and Small Enterprises, Micro and Small Enterprises- Cluster Development Programme , Raising and Accelerating MSME Performance(RAMP), SRI Fund, PM Vishwakarma and MSME Champions Scheme etc.

Further, in order to strengthen,  extend financial support, revive  and reconstruct MSMEs, the Government of India has taken the various steps, which inter alia includes the following:

- (i) To provide the credit, Rs. 5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS), for businesses,  including  MSMEs  was  announced  during  COVID-19  pandemic.  The  Scheme  was operational till 31.03.2023. As per a research report dated 23.01.2023 of the State Bank of India on ECLGS, almost 14.6 lakh MSME accounts, of which about 98.3 % of the accounts were in the Micro and Small Enterprises categories, were saved.
- (ii) Non-tax benefits extended for 3 years in case of an upward change in status of MSMEs.
- (iii) Rs. 50,000 crore equity infusion through Self Reliant India (SRI) Fund, which has a provision of Rs.10,000  crore  from  Government  of  India  and  Rs.  40,000  crore  through  Private  Equity  / Venture Capital funds.  This Scheme is aimed at providing growth capital to the deserving and eligible units of MSME sector.

- (iv) To protect and extended relief to MSMEs from the adverse impact of the COVID-19 pandemic and  to  ensure  the  sustainability  of  their  operations,  the  Ministry  of  Finance,  Government  of India vide O.M. No. F.1/1/2023-PPD dated 11.04.2023 introduced Vivad se Vishwas Scheme. In cases of failure by MSMEs to execute contracts during the Covid period, 95 per cent of the forfeited amount relating to bid or performance security, will be returned to them by government and government undertakings.

To provide financial support to MSMEs, in Budget announcement 2025, the Government of India has taken the various steps which inter-alia includes the following:

- i. For Micro and Small Enterprises Credit Guarantee coverage enhance from Rs. 5 crore to Rs. 10 crore.
- ii. Term loans up to Rs. 20 crore for well-run exporter MSMEs
- iii. Customised Credit Cards with following features:-
- a) Micro Enterprises
- b) Credit limit upto Rs.5 lakh
- c) Micro enterprises registered on Udyam portal

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