The number of Micro, Small, Medium enterprises that closed in 2022-23 was 6000% greater than two years ago - Parliamentary Question
10,655 micro, small and medium enterprises (MSMEs) closed in 2022-23. That is a 6,088% increase over the number in 2021-22, with 175 closures. The data was revealed by the Ministry of Micro, Small and Medium Enterprises, Government of India as part of the response to a Parliamentary Question asked in the Rajya Sabha. The data was compiled from the Udyam registration portal, the Ministry's online portal for registrations and dergitrations of MSMEs.
The number of closures in 2019-20 was 400 and in 2020-21 was 175. In 2021-22 it shot up to 6,222 and in the current fiscal upto 1 February, 2023 it was 10,655. This means that the rate of closure in the two post pandemic years was precipitously higher than in the pandemic year of 2020-21. The maximum number of closures in the last two years were in the states of Maharashtra, Tamil Nadu, Bihar, Gujarat, Rajasthan and Uttar Pradesh. A separate reply revealed that the number of MSMEs which shut shop between 2017 to 2022 was 17,452, the bulk of which happened in the last two years.
Although that is fraction of total number of MSMEs newly registered in the last two years alone - 21.72 lakh in 2021-22 and 17.83 lakh in 2022-23 - the rising closures point to distress in a sector that is labour intensive and contributes to exports. The number of persons employed in these newly registered MSMEs was 1.36 crore in 2021-22 and 1.11 crore in 2022-23, as per government data. A report in Livemint says that MSMEs contribute 30% to the country’s GDP, create over 11 crore jobs, and account for 48 percent of total exports.
The government launched schemes in the recently unveilved Budget 2023-24 to help the MSME sector including returning 95% of the forfeited money in case of failure to execute projects, extending a credit-guarantee scheme, and tax benefits to ensure timely receipt of payments to MSMEs.
Please Click here to read the answer to the Parliamentary question
Rajya Sabha Parliamentary question, 6 February, 2023, https://pqars.nic.in/annex/259/AU436.pdf
Tagged with: Parliamentary Questions Rajya Sabha Micro Small Medium Enterprises Unemployment Job losses MSME Sector closures Indian Economy