Micro, small and medium enterprises (MSMEs) form the heart of the Indian economy, and contribute a huge value added to the GDP and employment. The Udyog Aadhaar and subsequently Udyam Registration has been of great help in formalizing the MSMEs and offering them government benefits in recent years.
What is so amazing? With new government plans and MSME reforms 2025 approaching, entrepreneurs may wonder what will happen with Udyog Aadhaar and what changes may be introduced in the near future. In this blog we will discuss the future road map, the role of Udyam along with how MSME should get ready.
What is Udyog Aadhaar, why was it necessary?
Udyog Aadhaar was an easy registration procedure the MSMEs could use to enjoy government facilities such as:
- • Easy accessibility to bank loan under priority sector lending
- • Subsidies, plans, and programmes offered by Ministry of MSME
- • Participation in the government tenders without obstacles
One only needed an Aadhaar number and basic information to have a unique Udyog Aadhaar Number (UAN) generated.
Taking Udyog Aadhaar to Udyam Registration
Udyam Registration replaced the Udyog Aadhaar in July 2020. Why? Since the aged system was, the new one had to be.
- • Limited verification
- • Enterprise resumes with an abundance of multiple registrations
- • Tax deduction& low PAN and GST integration
These problems were addressed and MSME classification became more transparent and acceptable due to the connections as in PAN, GSTIN, and ITR data in lieu of Udyam Registration.
Then what is the future of Udyog Aadhaar after Udyam? The government has given business with Udyog Aadhaar till June 30, 2022, to migrate to Udyam. Businesses which are not migrated are likely to be restricted to availing government schemes.
Government Plans for Udyog Aadhaar After 2025
Udyog Aadhaar is in line with the online environment of the MSME. This is what the MSMEs can anticipate:
1) Full Integration with Udyam and with GST
Udyog Aadhaar holders that have not migrated will not be valid to continue receiving benefits as of 2025. Government intends to have this single unified portal where it will integrate:
- • Udyam Registration
- • GST records
- • Income Tax returns
This integrated system will facilitate being more compliant & more transparent.
2) End-to-end digital identity solution to MSMEs
The government is in the process of providing all MSMEs a digital ID that will be connected to Udyam, enabling it to be easier to:
- • Application of loans online
- • Be part of GeM (Government e-Marketplace)
- • Get automatic credit ratings
The digital push is part of MSME reforms 2025 of the ease of Doing Business.
3) Compliance & Monitoring AI Powered
Further plans can be modified with the use of AI-based compliance tracking to minimize the paperwork and automate subsidy approvals. Valid Udyam-registered SMEs will avail of:
- • Online e-verification of documents
- • Automatic eligibility assessments to schemes and tenders
4) Greater Advantages Connected to Digital Branding
Governmental promotion will be provided to SMEs in the direction of digital marketing. The registered MSMEs could receive access to:
- • Subsidized or free web- Question 8 of 30
- • Attendance of international Exhibitions
- • Under Udyam, splendid brand promotion schemes are being made.
This goes in line with the government vision of making the Indian MSMEs competitive to the rest of the World.
5) There was growth of Credit Support
A robust credit ecosystem is part of the future of Udyog Aadhaar (or Udyam). Expect:
- • Automated loan processing in less than one hour to authenticated MSMEs
- • Better interest free lending through CGTMSE
- • Export credits guarantees programs with exporters
The Demographic Change of MSME Reforms 2025 on Current Businesses
Here is what you should know as you still have Udyog Aadhaar but not migrated to Udyam:
- • Old Udyog Aadhaar certificate will not be valid: The old Aadhaar certificate of Udyog will not be accepted after 2025.
- • Compulsory GST regarding benefits: GST is not compulsory to all MSMEs presently, but in future some benefits will have to have a mandatory GST connection with Udyam.
- • Updating made mandatory: MSMEs are to update their details (turnover, investment, address etc) on the Udyam portal after every 3 years, otherwise, they will be slapped with penalties.
Why are MSMEs urged to Summertime Upgrades?
The faster you take to Udyam Registration, the better. Here’s why:
- • Keep taking benefit of subsidies, tenders and loaning
- • Inventory digital compliance requirements
- • Increase business credibility & branding
Procrastination on the migration may cause loss of opportunities since the government schemes beyond 2025 will be restrictive to Udyam registered units only.
How to migrate between Udyog Aadhaar and Udyam?
- • Log on Allowances Udyog Aadhar portal
- • Choose the option of those who already have Udyog Aadhaar. define leaking.
- • Feed in your UAN and authenticate it with OTP.
- • Change your information and connect by PAN, GST (in case of these).
- • Apply and download Udyam Certificate.
Final Thoughts
The future of Udyog Aadhaar is in the full electronic form and linking with Udyam. The MSME reforms 2025 being conducted by the government would encourage businesses to go digital with branding, transparent, and convenient access to finances.
Now is the right time to move to Udyam Registration in place of Udyog Aadhaar that you might still be on. Check the link http://www.udyog-aadhar.com
