- Ministry of Micro, Small and Medium Enterprises (MSME) has notified the Udyog Aadhar Memorandum (UAM) under the MSMED Act, 2006 in order to promote ease of doing business for the MSMEs.
- The micro, small and medium enterprises need to be registered under MSME for enjoying the benefits provided under various government schemes to the industry. A large chunk of enterprises in India do not register themselves under MSME due to the cumbersome paperwork involved in the entire process and therefore they cannot avail the benefits of the government schemes.
- The panel on financing the MSME sector, headed by K.V Kamath, had recommended that the registration of these enterprises should be universalized.
- Therefore to make these schemes effective for these enterprises and to ease the process of registrations, the government introduced the concept of Udyog Aadhar Memorandum.
- Udyog Aadhar Memorandum would ensure the wider coverage of MSMEs to avail benefits under various schemes of Central and State governments.
Salient Features of UAM
- Udyog Aadhar Memorandum is a one-page registration form for the micro, small and medium enterprises to get registered under the MSME.
- Earlier EM-1 and EM-2(Entrepreneur’s Memorandum-Part 1 and 2) forms were used which included a lot of documentation process. Now, this Udyog Aadhar memorandum serves as a replacement for these forms.
- It constitutes a self-declaration format under which the MSME will self-certify its existence and other minimum information required.
- The Ministry of MSME has set up an online portal called Udyog Aadhar Portal (Click Here) for online filling of UAM by the enterprises.
- Udyog Aadhar registration has enabled the enterprises to seek information about various services offered by all Ministries and Departments simply by using Udyog Aadhar Number.
- More than one Udyog Aadhar can be filed using the same Udyog Aadhar Number.
- This new system Of Udyog Aadhar is capable of delivering assured ease of doing business in the MSME sector. India’s rank in the Ease of Doing Business has improved this time, UAM is one of the reasons.
- Approximately 92 percent of the adult population in India is already registered under Aadhar. So enterprise can easily register themselves through UAM.
Other Related Facts
MSME (Micro, Small and Medium Enterprises)
- Small industries have always had an important role in the overall planning framework in India. In the Industrial policy resolutions, the smaller sector was given a special role for creating employment with low capital investment.
- The small industries contributed to the overall growth and have provided employment to the relatively unskilled and vulnerable section of the society.
- The small-scale industries were earlier known as the Village and Small Enterprise but in 2006 a new legislation MSME (Micro, Small and Medium Enterprises) Development Act was enacted which defined micro, small and medium enterprises.
- The medium enterprises were introduced for the first time in 2006.
New definitions of these enterprises
- After the MSMED Act of 2006, new definitions were to all these industries.
- Micro Enterprise- Enterprises where the investment in the plant and machinery does not exceed Rs25 lakh.
- Small Enterprise- Enterprises where the investment in the plant and machinery is more than Rs25 Lakh but does not exceed Rs5 crore.
- Medium Enterprise- Enterprises where the investment in the plant and machinery is more than Rs5 crore but does not exceed Rs10 crore.
- Service Sector- As the service sector has a lower investment requirement, it has different classification criteria-
- I. Micro Enterprise- Enterprises where the investment in equipment does not exceed Rs10 lakh
- II. Small Enterprise- Enterprises where the investment in equipment is more than Rs10 lakh but does not exceed Rs2 crore
- III. Medium Enterprise- Enterprises where the investment in equipment is more than Rs2 crore but does not exceed Rs5 crore
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