MSME entrepreneurs caught in Aadhaar web

Efforts of entrepreneurs to start new ventures in the micro, small and medium enterprises (MSME) sector in the State have hit a roadblock. The situation is the result of a reform that envisaged registration of units, incorporating Aadhaar linkage, introduced under a direction from the Union government.

The State Industries Department has stopped issuing Entrepreneurs Memorandum Part-I, a document which facilitates access to official channels for getting the required licences and finance to establish the unit. The issuance of the memorandum has been stopped from October 20.

The action of the State government is the result of introduction of Udyog Aadhaar Memorandum as per instructions from the Ministry of Micro, Small and Medium Enterprises, vide letter dated September 18 this year.

The Udyog Aadhar had been launched in Gujarat when Narendra Modi was the Chief Minister there.

According to the new regime, MSMEs are to register under a new format linking Aadhaar number and bank account. The application being filled up online facilitates registration for existing units only, according to industry representatives.

Basic document

The Entrepreneurs Memorandum Part-I is a basic document or a gateway to various facilities offered by government agencies and financial institutions. The document is necessary for the entrepreneur to approach banks, electricity board, pollution control board and other authorities.

The Udyog Aadhaar scheme doesn’t provide such a platform. Prior to the implementation of Entrepreneurs’ Memorandum in 2006, the State government had been providing a provisional SSI registration to new enterprises through the District Industries Centres.

The SSI provisional registration and permanent certification were transformed into Entrepreneur Memorandum-I and II respectively, in 2006.

All entrepreneurs had to comply with the rule then. Now, the government wants the units to get themselves registered under the new Udyog Aadhaar memorandum, but has failed to provide guidelines for new enterprises.

Industry sources said the State would have to issue a new notification to facilitate registration of new enterprises.