MSMEs no longer need Aadhar authentication for Udyam registration

Aadhar authentication has now been made voluntary for informal micro, small, and medium enterprise (MSME) units, tweeted Union Minister for MSMEs Narayan Rane. This comes with the objective to provide a business-friendly environment for MSMEs.

The notification for the same was issued by MSME Development Commissioner Dr Rajneesh (who goes by his first name) on May 22, 2023.

It stated, “Having been authorised by the Central Government, hereby notifies that Aadhaar authentication of enterprises shall be performed, on voluntary basis, using Yes/No authentication facility, during the process of registration of owners of informal micro enterprises on its digital platform, to facilitate access for availing of priority sector lending.”

The notification is set to be enforced immediately after publication in the Official Gazette.

This latest development comes two years after GSTIN was made optional. Earlier, in August 2021, the govt had delinked GST registration for MSMEs and allowed entrepreneurs or proprietors to use PAN cards for the registration.

India’s MSME sector at the time employed 7.6 crore people, of which 1.7 crore were women. Around one crore MSMEs have registered on the Udyam portal within a span of 25 months, said the MSME minister last year in August 2022. The ministry then set a target of two crore registrations within the next 16 months. The latest relaxations are aimed at helping achieve this target.

Earlier this month, the Reserve Bank notified that informal micro-enterprises (IMEs) with an Udyam Assist Certificate will be treated as micro-enterprises under MSME for the purposes of priority sector lending classification.

The launch of the Udyam Assist Platform (UAP) by the Ministry of MSME in January this year is aimed at making it easier for IMEs to register online through the assist process for generating Udyam Registration Number and Udyam Assist Certificate.