Over 79,000 new small and medium enterprises have been registered in the country in the past two-and-a-half months, since the government started a new online facility for entrepreneurs to file their applications to set up a business.
The top three States in terms of new firms registered since September 18, when the online registration facility was introduced by the Ministry of Micro, Small and Medium Enterprises, are: Maharashtra (19,000), Rajasthan (12,000) and Gujarat (nearly 10,000).
But the numbers are alarmingly low or even zero from some States, including some where Aadhaar enrolments haven’t begun on a large scale such as Assam where just half a dozen new firms have been registered. Tamil Nadu has seen just 172 new enterprises being registered, compared to nearly 2,100 in Bihar.
Though the government has simplified the registration requirements so that a new business needs to fill just a single page form and submit it online, it mandates entrepreneurs to validate their Aadhaar or Unique Identity (UID) numbers issued by the UIDAI. In fact, the Aadhaar number verification is the first field in the form and users cannot fill the rest of the form unless their UID is validated.
In early 2015, the Supreme Court had asked the government to modify all its forms in order to be compliant with its orders that the Aadhaar can only be used voluntarily and not mandated. In October, the court had added that the government may allow voluntary use of Aadhaar for beneficiaries of the public distribution system, NREGA, the national social assistance programme and employees’ provident fund.
Assam, where UID enrolments have only begun in a handful of districts, had advised the Centre to consider allowing PAN cards and other identity documents till the biometric records of its state citizens aren’t fully captured in the Aadhaar database. “In certain States, the number of registrations is zero or less than ten. It could be because of limited internet access, though we do allow people to submit forms offline as well,” said a senior government official. These include Arunachal Pradesh, Meghalaya and Mizoram where no new enterprise has been registered, Lakshadweep and Nagaland (one each) and Sikkim, where four firms have registered.
Expressing surprise at the low registration of firms in Tamil Nadu, one of the States with high industrial output, the official said, “It may be that some States are taking time to migrate to the new system as they have already set up online systems for filing entrepreneurial memorandum. This could also be why Andhra Pradesh (3,234) is seeing lower registrations in the Udyog Aadhaar platform than Telangana where nearly 8,000 firms have registered since September.”
Overall, more than 38.5 lakh micro, small and medium enterprises are registered, but a substantial part of economic activity takes place in the informal sector.