Udyog Aadhar was launched by the Ministry of Micro, Small & Medium Enterprises (MSME) in September 2015 as a simplified registration system for MSMEs in India. The Udyog Aadhaar number streamlined the MSME registration process, allowing businesses to easily access government benefits such as subsidies, financial aid, and tax exemptions.
However, from July 01, 2020, the government shifted from Udyog Aadhar to Udyam Registration, which is a stronger system as it cross-checks the information of the businesses with the Income Tax and GST database. This article explains what Udyog Aadhar was, how Udyog Aadhar became Udyam Registration, eligibility for this card, benefits under Udyam Aadhar, registration as per the current regime, and how the existing Udyog Aadhar holders can migrate to the current regime.
Key Takeaway
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Udyog Aadhar, launched in 2015, has been replaced by Udyam Registration since July 2020.
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Registered MSMEs gained access to collateral-free loans up to ₹1 crore, reduced interest rates, 45-day payment protection, and various subsidies.
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The scheme covered micro, small, and medium enterprises with investment limits ranging from ₹1 crore to ₹50 crores for manufacturing and ₹50 lakh to ₹10 crores for services.
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All Udyog Aadhar-registered businesses were required to migrate to Udyam Registration by March 2021 to continue receiving government benefits.
What Is Udyog Aadhar?
Udyog Aadhar is a 12-digit identification number issued to MSMEs upon registering their profile under the Udyog Aadhar Memorandum (UAM) system. This registration enabled small businesses to self-certify their existence and claim various government schemes without providing extensive documentation.
The Udyog Aadhar system was intended to foster ease in doing business by removing all bureaucratic hurdles. Enterprises were able to register in minutes with the help of just their Aadhaar card and without having to go to government offices. The registration ensures that MSMEs receive formal recognition, which they can use to participate in government tenders, access collateral-free loans, and avail themselves of various schemes to encourage the growth of small businesses.
Objectives Of Udyog Aadhar
The Udyog Aadhar Scheme was launched with the following main objectives:
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To simplify MSME registration by merging multiple forms into one digital system.
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To promote financial inclusion through easy access to collateral-free loans.
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To offer formal recognition to small enterprises for participation in government tenders.
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To bring unorganised sector units into the formal economy.
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To reduce documentation and approval time, encourage entrepreneurship in semi-urban and rural areas.
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Assisted enterprises to avail government Udyog Aadhar subsidies for technology upgradation and skill building.
Also, learn What is mAadhaar here.
Eligibility Criteria For Udyog Aadhar
The Udyog Aadhar eligibility was expanded to cover enterprises that engaged in manufacturing or service activities in the MSME category, as follows:
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Enterprise Category |
Investment in Plant & Machinery/Equipment |
Annual Turnover |
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Micro Enterprise |
Up to ₹2.5 Crore |
Up to ₹10 Crore |
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Small Enterprise |
Up to ₹25 Crore |
Up to ₹100 Crore |
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Medium Enterprise |
Up to ₹125 Crore |
Up to ₹500 Crore |
The Udyog Aadhar eligibility criteria are:
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The enterprise should be registered in India
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The proprietor should have a valid Aadhar card
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No restrictions based on annual turnover
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Multiple activities could be registered against a single Udyog Aadhar Number
Benefits Of Udyog Aadhar Registration
The advantages of Udyog Aadhar registration gave MSMEs the following huge competitive advantages:
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Collateral-Free Loans: Availability of Loans up to the limit of ₹1 crore under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme
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Reduced Interest Rates: Business loans provided by banks at an interest rate lower than normal commercial rates
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Government Tenders: Participation with exemption from earnest money deposit requirement
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Payment Protection: MSMED Act guarantees payments within 45 days of order receipt.
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ISO Certification: Reimbursements of Costs for ISO Certification
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Technology Subsidies: Access to Technology upgradation subsidies and grants
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Trade Fair Participation: Support for participation in international trade fairs and exhibitions
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Priority Sector Lending: Most of the banks dedicated special funds to MSMEs under priority sector targets.
Documents Required For Registration
The system for Udyog Aadhar registration was made less document-intensive:
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Aadhar Card: Primary Document used for identification as well as address confirmation
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PAN Card: Information about tax (Physical copy is not required for online registration)
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Bank Account Details: Account number and IFSC for receiving subsidy.
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Investment Declaration: Self-declared investment in plant and machinery or equipment.
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Business Information: Name of enterprise, date of commencement and activity information.
The Udyog Aadhar benefits included this self-declaratory format, which provided considerable relief to small entrepreneurs from documentation, especially those in the rural and semi-urban areas with poor reach to the formal systems of record-keeping.
Also, check out List of Documents Required for Aadhaar Card here
Step-By-Step Udyog Aadhar Registration Process (Online)
The process of the Aadhar Udyog Register was available completely online and free of cost:
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Go to the Udyog Aadhar registration portal and click the new registration option
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Enter the Aadhar number (12-digit) of the Proprietor
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Verify using the OTP sent to the registered mobile number associated with Aadhar
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The system displays the name and address fetched automatically from the UIDAI database
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Give business information such as the enterprise name, the type of organisation, and the date of commencement
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Declare the main business activity ( using NIC codes) for manufacturing or service
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State the investment in plants and machinery used in manufacturing or the equipment of service enterprises
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Provide bank account information and contact information, such as email and mobile number
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Fill in the form and get a unique Udyog Aadhar Number instantly.
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Download the acknowledgement sent to the registered email address.
The Udyog Aadhar online process has been known to take an average of less than 15 minutes from the beginning to the end of the process, making it among the most entrepreneur-friendly registration processes launched by the Indian government.
Also, check out How to Apply for an Aadhaar Card Online here.
How To Download Udyog Aadhar Certificate
Registered enterprises could access their Udyog Aadhar number and certificate anytime:
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Visit the Udyog Aadhar portal and click on the print or ‘Udyog Aadhar Certificate Download’ option
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Enter the registered Udyog Aadhar Number (UAN) issued upon registration
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Give the mobile number registered with the system for OTP verification
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Enter OTP
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See complete registration details, including enterprise info and investment details.
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Download the MSME certificate in PDF format.
Also, read How to Download the Aadhaar Card here.
How To Retrieve Or Edit Udyog Aadhar Number
Entrepreneurs who lost their Udyog Aadhar number could retrieve it through the portal:
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Open the homepage and choose the "Forgot UAN" option.
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Insert registered Aadhar number and mobile number
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The UAN will be sent to you via SMS on the registered mobile number.
For Making Corrections Or Updates:
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Log in with your UAN and update your business address or investment figures, among other options.
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Edit bank account details or account activity descriptions if needed.
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Manual documents are required because the system does not include automatic update features.
Common Issues During Registration
During the application process for the Udyog Aadhar registration procedure, many common problems were faced by the applicants:
OTP Not Received:
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Incorrect mobile number registered with Aadhar or network delays
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Wait a few minutes, then ask for an OTP resend.
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Make sure your Aadhar-linked mobile number is active.
Aadhar Verification Fails:
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The entered information did not perfectly match the UIDAI records.
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Name and address should match as per the Aadhar card, including spelling.
Server Overload:
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The Udyog Aadhar registration online system sometimes took too long to load during peak hours.
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Try to register during non-peak hours or try again later
Problems During Bank Account Validation:
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Bank details did not match the name of the enterprise, or an incorrect IFSC code was entered.
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Please use the officially approved IFSC codes from the bank's website.
Conclusion
The Aadhar Udyog system was a major step towards making business registration in MSMEs in India easier. By removing paperwork and allowing online registration at the click of a button, it empowered millions of entrepreneurs to legalise their ventures and avail government benefits.
Even though Udyog Aadhar has been substituted with a stronger Udyam Registration mechanism from July 2020 onwards, its spirit lives in the streamlined MSME registration regime. All the entrepreneurs that were registered under Udyog Aadhar had to transition to Udyam Registration by March 2021 to continue receiving such benefits.
