Udyam Assist Platform: An Initiative for Formalization
In January of this year, the government introduced the Udyam Assist Platform (UAP) as part of its efforts to formalise micro enterprises in India. The platform aims to facilitate the registration of informal enterprises, such as street vendors, enabling them to access priority sector lending (PSL) by banks. The main objective of UAP is to bring a large number of these informal micro enterprises (IMEs) into the formal economic framework, with the assistance of designated agencies (DAs).
Role of Designated Agencies (DAs)
Designated agencies, including banks, non-banking financial companies (NBFCs), and microfinance institutions (MFIs), play a crucial role in the UAP process. These agencies can authorise their officers to act as nodal officers on UAP. By registering on the platform, DA users gain access to upload transactional data of IMEs, aiding banks in assessing their liquidity and repayment capacity for loan purposes. This surrogate data helps address the issue of limited access to affordable credit in the MSME sector.
Registration Process and Data Sharing
IMEs cannot directly register themselves on UAP; they must approach their respective bank, NBFC, or MFI for registration. DAs are responsible for sharing the necessary information available to them about the IMEs on the platform. IMEs are not required to submit any additional documents for registration with DAs. Once the data is processed and validated, Udyam registration numbers (URNs) and Udyam certificates (UACs) are generated and made available for download by both DAs and the enterprises from UAP.
Voluntary Aadhaar Authentication and PSL Benefits
In a move to encourage IMEs to register on UAP and access PSL benefits, the MSME ministry made Aadhaar authentication voluntary for IMEs in May. The ministry stated that this decision would enhance good governance, prevent fund leakage, and provide better access to services. The central government authorised the MSME ministry for Aadhaar authentication of IMEs in March.
Progress on Udyam Registration
As of June 27, the Udyam portal reported that over 30.93 lakh IMEs have registered for Udyam via UAP. This indicates a positive response from micro enterprises seeking to formalise their operations and access financial benefits.
The Udyam Assist Platform continues to play a crucial role in the formalisation of IMEs, facilitating their inclusion in the formal economic system and improving their access to credit and financial opportunities.
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