Deciphering the Dynamics

• MSME Registration process:

• For New entrepreneurs and entrepreneurs having EM-II registration 

• Click the button “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II” shown on the home page of Udyam Registration Portal.  
• Enter the Aadhaar number and the name of the entrepreneur and click on the “Validate and Generate OTP Button. 
• After succesful validation of OTP the PAN Verification page opens.
• Enter the “Type of Organisation” and the PAN Number and click on the “Validate PAN” button.
• After verification of PAN, the Udyam Registration form will appear, and the entrepreneurs need to fill in their personal details and details of their enterprise
• Enter the investment and turnover details, select the declaration, and click on the “Submit and Get Final OTP” button. The OTP is sent, and after entering the OTP and submitting the form

• Registration For Entrepreneurs Already Having UAM

• click the button “For those having registration as UAM” or “For those already having registration as UAM through Assisted filing” shown on the home page of the government portal
• The options provided are to obtain OTP on mobile as filled in UAM or obtain OTP on email as filled UAM. After choosing the OTP Options, “Validate and Generate OTP” is to be clicked.
• After entering OTP, registration details are to be filled on the MSME registration form, and Udyam registration will be complete.

Udyam Registration Benefits

• Special Preference in Government Tender
• Benefit of a government security deposit waiver that is helpful while participating in e-tenders
• Access to Bank Loans at very low interest rates around 1-1.5%.
• Allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years.
• One Time Settlement Fee for non-paid amounts of MSME
• Eligible for priority sector lending from banks.
• 1% Interest Rate Exemption on Bank Overdraft (OD).
• Eligibility for Various Tax Rebates.
• Priority Consideration for Government Licensing and Certification.
• Tariff Subsidies and Tax and Capital Subsidies.
• Discounts on Electricity Bills.
• Protection Against Delayed Payments from Buyers.
• Tax Rebates.
• A 50% Discount on Government Fees for Trademark and Patent Filing.
• Expedited Dispute Resolution.
• help the MSMEs in availing the benefits of government schemes such as the Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Public Procurement Policy
• Exemption scheme from direct taxes
• ISO certification fees reimbursement
• Special consideration in International trade fairs.

Challenges Faced by MSMEs

Together with benefits, there are many challenges also which the MSME have to face which are listed below:

• Access to Finance: 
• Regulatory Compliance: 
• Market Access and Competition
• Technology Adoption 
• Skills Shortages
• Infrastructure Constraints
• Supply Chain Disruptions: 
• Access to Markets: 

Addressing these challenges requires a comprehensive approach involving government support, private sector engagement, and community partnerships. By providing MSMEs with access to finance, business development services, market opportunities, and supportive regulatory environments, stakeholders can help unlock the potential of MSMEs as engines of economic growth and job creation.

Compliances for the Companies dealing with MSMEs:

• As per Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Order, 2019, all companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty five days from the date of acceptance or the date of deemed acceptance of the goods or services as per the provisions of section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006) (hereafter referred to as “Specified Companies”), shall submit a half yearly return to the Ministry of Corporate Affairs stating the following: 

1. The amount of payment due and 
2. The reasons of the delay; 

• Every specified company shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers existing on the date of notification of this order within thirty days from the date of publication of this notification. 

• Every specified company shall file a return as per MSME Form I annexed to this Order, by 31st October for the period from April to September and by 30th April for the period from October to March.

Conclusion

The Micro, Small, and Medium Enterprises (MSMEs) sector plays a vital role in driving economic growth, fostering entrepreneurship, and promoting inclusive development. Throughout this blog series, we’ve explored the significance of MSMEs, their benefits to the economy, the challenges they face, and the various support mechanisms and policies in place to assist them.

Despite facing obstacles such as limited access to finance, regulatory barriers, and competition from larger corporations, MSMEs continue to thrive and innovate. Governments and organizations worldwide are implementing initiatives to empower MSMEs, ranging from financial assistance programs to technological advancements and capacity-building efforts.

Some Useful Links:

• Ministry of Micro, Small and Medium Enterprises (MSME), Government of India
  https://msme.gov.in/

• My MSME
  https://my.msme.gov.in/MyMsme/Reg/home.aspx

• BSE SME Website
  https://www.bsesme.com/

References and Bibliography

• HANDBOOK FOR MSME ENTREPRENEURS – ICSI