How Udyog Aadhar Benefits to Small Business in India

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Kunwar Prithvi Singh Chauhan
Part time journalist, full-time observer. Editor-in-Chief at The Indian Wire. I cover updates related to business and startups.

Micro, Small and Medium Enterprises contribute about 40% of industrial production and 45% of exports. These figures clearly indicate the importance of the MSME sector for the growth of the Indian economy. Understanding the importance of MSMEs, the Government of India enacted Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) with an aim to promote and develop micro, small and medium enterprises.

All types of business entities, whether it is Proprietorship, Partnership, Private Limited Company, Limited Liability Partnership etc are eligible for MSME Registration. MSME Registration is Aadhaar based registration and is also known as udyog aadhar.

MSME Registration

The micro, small and medium enterprises must be registered under MSME to take advantage of the benefits provided under various Government schemes to the micro, small and medium scale businesses. Though not a compulsion, it is always advisable for the newly established enterprises to get themselves registered under the ministry. The registered enterprises are eligible for certain benefits that let them go a step forward towards making them successful commercially.

The Udyog Aadhaar helps the small entrepreneurs in getting themselves registered under MSME in a simpler way by just filling a one-page form and giving certain enterprise related details.

What is Udyog Aadhaar

Udyog Aadhaar comes in a form of a Certificate and it has 12 digit registration number that is circulated by the Ministry of Micro, Small and Medium Enterprises (MSME) to the existing or new small and medium enterprises who have initiated and completed the process for registration. The Main reason behind launching the Udyog Aadhar is to maximize the benefits to the small and medium scale industries In India, who are registered with Ministry of Micro, Small and Medium Enterprises.

The salient features of Udyog Aadhaar

  • Under Udyog Aadhar, Registration is online instead of personal filling. It is just a click job.
  • Under Udyog Aadhar, UAM can be filed by self-declaration on the details of the enterprise.
  • Under Udyog Aadhar, Personal Aadhaar number, Industry name, Address, Bank details, and some common information, The sufficient details that are required for filing for registration
  • Under Udyog Aadhar, One can file more than one Udyog Aadhaar with same Aadhaar Number.
  • Under Udyog Aadhar, There is No Fee for filing.
  • Under Udyog Aadhar, Once it is filled and uploaded, the registration number is received in the email id that is provided.

Udyog aadhar Benefits to small and medium business

Once registered with Msme and receives a Udyog aadhar , the micro, small or the medium enterprise would be eligible for all government scheme benefits like without guarantee loan, easy loan, the loan with the low rate of interest. The Micro and Small Enterprises are also eligible for collateral-free loans up to Rs. 1 crore under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE Scheme). This is a collateral free loan and the Central Government takes guarantee of the borrower and To improve the timely funds’ availability to the MSME Sector, the Government of India has classified loans to Micro and Small Enterprises under priority sector lending. The banks are required to have 20% year on year growth in lending to Micro and Small Enterprises.The MSME registered enterprises get the financial support from the Government to participate in the foreign expo.The enterprise is also entitled to the Government subsidies as Central Government and State Governments announced under different schemes and subsidies for the MSME sector from time to time.The Government of India, by the way of  Public Procurement Policy, 2012 provides that all Central Government Ministries, Departments, and Public Sector Undertakings shall give Preference to  Micro and Small Enterprises in Government tenders  and should procure the minimum of 20 percent of their total annual value of goods or services from Micro and Small Enterprises.

Micro and Small enterprises also enjoy Other Subsidies from State Governments such as extended credit facilities, Industrial extension support, and services, Assistance in marketing, Assistance for construction of industries in underdeveloped areas, Technical consultancy, assistance in the capital, Excise exemption and Exemption under direct tax laws etc.


With so many benefits given to the Micro, small and medium enterprises in India, one must get a Udyog Aadhar registration done as soon as possible. As If you want to claim any benefit from central or state government under a scheme for Micro and Small industries, then you would need the Udyog Aadhar Certificate.

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