During the COVID-19 pandemic, the global economy faced a severe downturn, and its impact was strongly felt across all sectors—especially the Micro, Small, and Medium Enterprises (MSMEs). In India, these enterprises form the backbone of the economy, with around 42.2 million MSME units contributing to nearly 45% of the country’s total manufacturing output. However, the nationwide lockdown and disruptions in supply chains left many MSMEs struggling for survival.
To support these vital units, the Indian government introduced a series of revised policies, benefits, and schemes with a strong emphasis on the Udyam Registration framework. By ensuring formal recognition through Udyam Registration, the government aimed to enable MSMEs to access the full range of relief measures and benefits announced during the crisis.
Recognizing the urgency of the situation, the Ministry of MSME—under the leadership of Union Minister Nitin Gadkari—called for immediate upgrades to existing schemes. Gadkari emphasized the need for swift delivery of RBI’s relief measures and urged businesses to register under Udyam to be eligible for government support.
The Confederation of All India Traders (CAIT) estimated that the Indian trade sector could face losses up to ₹380 lakh crore, while industries like chemicals may incur losses of about ₹12.9 crore. As MSMEs are crucial to India’s economy, offering employment and driving local production, protecting and reviving them became a national priority.
To ensure targeted support, the government rolled out a range of financial and regulatory reliefs. These measures were made easily accessible to businesses formally registered under Udyam, encouraging more entrepreneurs to complete their registration and become part of the formal economic structure.
A special package of ₹1 lakh crore was announced for the MSME sector. To ease liquidity issues, the government proposed schemes to clear pending payments from Central and State Governments. Registered MSMEs were also able to benefit from RBI’s three-month moratorium on loan repayments and the reduction in repo rates, which directly reduced borrowing costs.
The pandemic led countries such as the US and Japan to minimize their dependence on Chinese imports. This shift opened new global opportunities for registered Indian MSMEs to expand their exports. With support from government incentives and reduced operational costs, Udyam-registered units were better positioned to scale up and tap into new markets.
The government considered permitting the use of the Employees' State Insurance (ESI) scheme to help MSMEs pay wages. Businesses that were Udyam-registered were at the forefront of receiving these wage-related benefits, ensuring that workers remained employed despite financial challenges.
To offer tax relief, the government extended the deadline for filing original and revised income tax returns for FY 2018-19 to June 30, 2020. MSMEs with Udyam Registration were eligible for reduced interest rates of 9% for delayed payments related to TDS, TCS, and advance tax. Additionally, no penalties or legal action were imposed during this extended period, providing a cushion for affected businesses.
All these schemes and revised benefits were streamlined under the Udyam Registration portal. The Udyam platform acted as a gateway for MSMEs to access financial support, tax relief, subsidies, and government schemes. It also helped identify eligible businesses and ensured transparency in the disbursal of aid.
Furthermore, after July 1, 2020, Udyam replaced the earlier Udyog Aadhaar Memorandum (UAM) system. The Ministry of MSME mandated that all enterprises must re-register under Udyam by March 31, 2021, to continue being recognized as valid MSMEs. On April 1, 2021, PAN and GSTIN were made mandatory for all registrations, reinforcing the move toward formalization and accountability.
The pandemic exposed the vulnerabilities of unregistered businesses and highlighted the importance of being part of the formal economic system. Udyam Registration not only enabled MSMEs to survive the crisis but also positioned them to grow, compete, and thrive in the post-pandemic era.
Through a simplified registration process, dedicated government support, and financial packages, Udyam became a symbol of resilience and recovery for millions of small businesses across the country. For any MSME seeking long-term sustainability and access to institutional support, Udyam Registration is no longer optional—it is essential.
An enquiry form is available on eudyogaadhaar.org, where you can get in touch with our executives for any assistance or queries related to Udyam Registration.
For further support, you can also reach out to us through the Contact Us page on our website. We are here to help you complete your registration quickly and efficiently.
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Lokesh Rawat, From Madhya Pradesh
Recently applied MSME Certificate
