22% of registered MSMEs closed in Uttarakhand

Lack of demand, shortage of working capital and power shortage are among the reasons for the closure of 7,485 units

Nearly 22 per cent or 7,485 of a total of 33,565 registered units in the MSME sector are permanently closed and 2,313 are untraceable in Uttarakhand due to various reasons, the fourth census report has said.

Significantly, of the total 226,513 units that are in working condition, 202,746 are unregistered and only 23,767 are registered, the report revealed. And in the registered category, 13,439 units are in manufacturing and the rest are in the service sector.

Similarly, in the unregistered category, 170,466 units are in the service sector and the rest are in manufacturing, the report said. Nearly half the total number of enterprises is in the rural areas. Total gross output of the registered units is Rs 11,839 crore.

Among the 23,767 registered MSMEs, only 35 are medium-sized while 384 are small and the remaining 23,348 are micro enterprises.

Of the 23,767 registered units, nearly 10 per cent (or 2,434) are run by women entrepreneurs and 17,814 are self-financed. In the unregistered category also, a whopping 192,321 are self-financed, which is considered a healthy sign.

Nearly 400,000 people are directly employed by MSMEs. In the unregistered category, 201,486 people are employed in the service sector and 115,629 are employed in registered units. In the registered category, 62,915 are employed in manufacturing and only 19,706 in the service sector. Only six to seven per cent of women get employment in the MSME sector, the survey said.

Lack of demand is the main reason for the closure of 7,485 units. Other factors like shortage of working capital, non-availability of raw material, power shortage, labour and market problems also contribute to the sickness.

After completing the fourth census of registered MSMEs in Uttarakhand, the department of industry last year had taken up the arduous task of carrying out a survey of unregistered units. The survey of non-agriculture enterprises was conducted in 337 villages and 13 towns in the hill state, where industrialisation gathered momentum over the past three to five years, mainly owing to the central industrial package that offers a slew of tax benefits.

The hallmark of the fourth census of registered and unregistered SMEs was that the quality of data is considered to be of a high class, with enumerators mainly focusing on on-the-spot surveys. Nodal officers, statisticians from the department of statistics and staff of the rural development and health departments were also involved in the survey.

In the last census, nearly 30,000 MSMEs were registered in the hill state.

The main objective of the census is to create a database for MSMEs sector-statistics and information regarding the health of various units as well as the employment scenario.

“Since SMEs have shown healthy growth in Uttarakhand and emerged as the biggest employment provider, we want the government to provide the best incentives, including cheap and uninterrupted power, and take steps for the quick revival of viable sick units. Besides, the state should also set up a revolving fund for rehabilitation,” said Industries Association of Uttarakhand (IAU) President Pankaj Gupta.