Bihar has topped in Udyog Aadhaar registrations in the country, leaving behind many states with comparatively higher rates of industrialisation, but officials of the Ministry of Micro, Small and Medium Enterprises (MSME), the nodal ministry for managing Udyog Aadhaar registrations in the country, have raised concern that the highest number of such registrations from Bihar might be due to fake registrations.

On 18 September 2015, the MSME had notified that every MSME unit had to fill Udyog Aadhaar Memorandums (UAM) online, a move to simplify the registration procedure for entrepreneurs and promote ease of doing business. The MSME ministry is currently headed by Giriraj Singh.

According to the Udyog Aadhaar registration database available on the MSME’s website, the highest number of Udyog Aadhaar registrations, 727,000 have come from Bihar, with Uttar Pradesh (UP) at the second spot with 532,768 registrations. Surprisingly, Andhra Pradesh, a state with a sizeable number of MSME units, has 217,000 Udyog Aadhaar registrations, Gujarat has 386,185 registrations, Maharashtra 349,637 and Haryana has 48,823 registrations.

A ministry official refused to make any comments to The Sunday Guardian on record, but, off the record, several officials admitted that in Bihar and UP, there are some discrepancies in the process of registration of Udyog Aadhaar.

On the condition of anonymity, a senior MSME ministry official told The Sunday Guardian: “The data is shocking as no one will believe that Bihar has the highest number of MSME industrial units. It seems that to avail loans under the Mudra scheme, more and more people are registering themselves as entrepreneurs; perhaps this has multiplied the number of Udyog Aadhaar registrations in the state.” 

“The MSME is closely watching all these registrations and will come up with measures to stop malpractices, if any, in registrations,” the same official cited above said.

The alleged fraud in the registration of Udyog Aadhaar is also evident from the fact that the data of MSMEs on the existing industrial units in districts of Bihar is not matching with Udyog Aadhaar registrations. As per MSME data on industrial units in Bihar, East Champaran, a district with only 1,477 small industrial units, has 41,038 Udyog Adhaar registrations. West Champaran, which has only 1,845 existing small industrial units, has over 50,000 Udyog Aadhaar registrations.

The situation in UP is also the same as in Bihar as Jaunpur, one of the least developed districts of the state, surprisingly has 36,950 Udyog Aadhaar registrations.

The MSME sector is the largest job provider in the country, contributing about 8% to GDP. The sector has a share of 45% in the country’s manufacturing output growth.


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