Udyam registration and MSME registration are both registration processes for small and medium enterprises in India. Udyam registration was introduced in 2020 and replaced the earlier registration process known as MSME registration.
The main difference between the two is the definition of the enterprises covered under each registration. Udyam registration covers a broader range of enterprises compared to MSME registration. Udyam registration includes micro, small, and medium enterprises (MSMEs) based on their investment in plant and machinery or equipment, whereas MSME registration was based only on the investment in plant and machinery.
Under Udyam registration, an enterprise can be classified as micro, small, or medium based on the following investment limits:
Micro enterprise: investment up to Rs. 1 crore in plant and machinery or equipment.
Small enterprise: investment between Rs. 1 crore and Rs. 10 crore in plant and machinery or equipment.
Medium enterprise: investment between Rs. 10 crore and Rs. 50 crore in plant and machinery or equipment.
Udyam registration also offers several other benefits such as easy online registration, timely resolution of disputes, and simplified compliance procedures. Additionally, Udyam registration is linked to the enterprise’s PAN and GSTIN, making it easier for businesses to comply with tax and regulatory requirements.
Udyam registration is a more comprehensive and inclusive registration process for small and medium enterprises in India, providing more benefits and easier compliance procedures compared to the earlier MSME registration process.
Advantages of linking Udyam registration with PAN and GSTIN
Linking Udyam registration with PAN and GSTIN offers several advantages for small and medium enterprises (SMEs) in India. Here are some of the key benefits:
Easy compliance
By linking Udyam registration with PAN and GSTIN, SMEs can easily comply with tax and regulatory requirements. This is because Udyam registration provides a unique identification number that is linked to these IDs, which makes it easier for businesses to file returns and make payments.
Access to government schemes and subsidies
Linking Udyam registration with PAN and GSTIN can also help SMEs access government schemes and subsidies. This is because Udyam registration is a mandatory requirement for availing of several government schemes, such as the Credit Guarantee Scheme, which provides collateral-free loans to SMEs.
CreditworthinessÂ
Udyam registration, when linked with PAN and GSTIN, can also enhance the creditworthiness of SMEs. This is because Udyam registration provides a formal recognition of the SME’s existence, which can help banks and financial institutions assess their creditworthiness and offer loans at competitive rates.
Reduction in paperworkÂ
Linking Udyam registration with PAN and GSTIN can also help SMEs reduce paperwork. This is because the unique identification number provided by Udyam registration can be used for all statutory requirements, reducing the need for separate registrations.
Simplified compliance procedures
Linking Udyam registration with PAN and GSTIN can also simplify compliance procedures for SMEs. This is because the registration process is streamlined and automated, and SMEs can file returns and make payments online.
linking Udyam registration with PAN and GSTIN provides several advantages for SMEs in India, including easy compliance, access to government schemes and subsidies, enhanced creditworthiness, reduction in paperwork, and simplified compliance procedures.
Udyam registration and its role in promoting the Make in India initiative
Udyam registration plays an important role in promoting the Make in India initiative, which is a flagship program launched by the Indian government to promote the manufacturing sector in the country. Here’s how Udyam registration contributes to this initiative:
Encouraging entrepreneurshipÂ
Udyam registration provides a formal recognition to micro, small, and medium enterprises (MSMEs), which encourages entrepreneurs to start new businesses and contribute to the manufacturing sector in India.
Facilitating ease of doing businessÂ
Udyam registration simplifies the registration process for MSMEs, making it easier for them to comply with regulations and operate their businesses efficiently. This contributes to the overall ease of doing business in India, which is an important aspect of the Make in India initiative.
Promoting local manufacturingÂ
Udyam registration encourages MSMEs to set up manufacturing units in India by providing several benefits, such as access to credit, subsidies, and government schemes. This promotes local manufacturing, which is a key objective of the Make in India initiative.
Enhancing competitiveness
Udyam registration also enhances the competitiveness of MSMEs by providing them with formal recognition and access to credit, which can help them improve their production processes, adopt new technologies, and expand their operations.
Boosting job creationÂ
Udyam registration promotes the growth of MSMEs, which are a significant source of employment in India. This contributes to the overall objective of the Make in India initiative, which is to create new jobs and increase the participation of the manufacturing sector in India’s economic growth.
Also read: Benefits of MSME Udyam Registration
Summary
Udyam registration plays a crucial role in promoting the Make in India initiative by encouraging entrepreneurship, facilitating ease of doing business, promoting local manufacturing, enhancing competitiveness, and boosting job creation in the manufacturing sector.
