The Ministry of Micro, Small and Medium Enterprises launched the Udyog Aadhaar scheme back in 2015 under the Micro, Small and Medium Enterprises Development Act, 2006. This scheme’s primary objective is to reduce the red tape involved in the registration process for micro, small, and medium businesses.

Registered units under this scheme –

• Micro enterprises – 68+ Lakh.
• Small enterprises – 8.4+ Lakh.
• Medium enterprises – 33,000+

What is Udyog Aadhar?

It is a 12-digit alphanumeric number provided to every applicant upon registration. The Udyog Aadhaar registration is free of cost.

Registration is optional for these entities –

• Enterprises that have already availed SSI registration.
• Enterprises that have availed Entrepreneurship Memorandum-I or Entrepreneurship Memorandum-II.

These bodies can file the Udyog Aadhaar Memorandum (UAM) if desired. There is also no restriction on the number of UAMs an enterprise can file under a single Aadhaar number.

How to apply?

Entrepreneurs have to head over to the scheme’s official website to initiate the registration process. They only have to provide their name and Aadhaar number to complete the OTP procedure on their mobile number registered with UIDAI.

Next, applicants have to provide the following basic information for Udyog Aadhar application –

2. Category – General, SC, ST, or OBC. Relevant documents have to be provided to prove SC, ST, or OBC category.
3. Whether physically handicapped.
4. Name of the business – An applicant can register multiple businesses to avail more than one UAM number under the same Aadhaar number.
5. Type of enterprise.
6. Location of the plant – An applicant can add multiple locations during one registration.
7. The official address of the business.
8. The commencement date of operations.
9. Details of earlier registration – For example, SSI registration, Entrepreneurship Memorandum-I or Entrepreneurship Memorandum-II.
10. Bank account details.

In addition to the above, applicants also have to provide the following information during Udyog Aadhar registration process –

• Major activity – Whether the business concentrates primarily on manufacturing or providing services. An enterprise has to select manufacturing if it takes part in both activities, where the major activity is the former.
• District Industries Centre (DIC) – Name of the DIC, which is near to the business. The field will only be active if there are multiple DICs in the provided area.
• National Industry Classification (NIC) code – An applicant can add more than one NIC code.
• Total investment in the plant and machinery as of date.
• Total number of employees.

Applicants have to click the “Submit” button after providing all the above information. An OTP will be sent to the Aadhaar-linked mobile number. Entering it and clicking the “Submit” button again will conclude the registration process.

Benefits of this scheme

Some of the Udyog Aadhar benefits include –

1. Subsidy under the Credit Linked Capital Subsidy Scheme (CLCSS)

Registered enterprises can avail a capital subsidy of 15% under the Credit Linked Capital Subsidy Scheme (CLCSS) to upgrade technology. Entrepreneurs can quickly expand their manufacturing business by availing this benefit.

2. Subsidy on patent registration

Enterprises will also be eligible to avail 50% subsidy on expenses incurred during patent registration.

3. Each availability of collateral-free loans

Units will be able to reap the benefits of MSME loans of up to Rs. 1 Crore under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme.

4. Discounts on electricity bills

Registered units under this scheme will be eligible for concessions when paying electricity bills.

5. Subsidy on barcode registration

The government will provide up to 75% subsidy on the registration fee to all categories of enterprises.

In addition to the above, there are several other benefits that MSMEs can benefit from Udyog Aadhaar. Entities registered under this scheme can quickly expand their service business or manufacturing unit.