Benefits available to Udyam Registered MSMEs

Benefits available to Udyam Registered MSMEs

The government of India has the portal for MSMEs registration with website link as under:
The MSMEs registration (Udyam Registration number) enables these enterprises to avail the benefits under the various schemes launched by the GoI. A lot of awareness amongst the MSMEs needs to be built up for these multiple benefits available to them, once they have the Udyam Registration number.

 Collateral Free loans from banks: Any collateral / third party guarantee free credit facility (both fund as well as non-fund based) extended by eligible financial institutions, to new as well as existing Micro and Small Enterprise, including Service Enterprises, with a maximum credit cap of Rs 200 lakh are eligible to be covered under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

Subsidy on Patent Registration: The subsidy can be availed for patent registration by giving applications under the National Manufacturing Competitiveness Programme.

Protection for Micro & Small Enterprises against Delayed Payments: If the buyer delays the payment for more than 45 days after accepting the products or services then MSEs suppliers may approach the Micro and Small Enterprises Facilitation Council (MSEFC) constituted under the Act in all State/UTs. U/ S 16 of MSMED Act, delayed payment to supplier units, attracts compound interest with monthly interests at three times of the bank rate notified by the Reserve Bank.
Lower Electricity Bills: Concession is available to all the MSME enterprises that have the MSME registration certificate on their application to the department of electricity along with the certificate of registration.

ISO Certification Cost Reimbursement: The scheme is applicable to those Micro & Small (Manufacturing/ Service) Enterprises that have already acquired ISO-9000/ISO-14001/ HACCP certification from NABCB registered Certifying Body. Expenditure for the training for ISO Certification will also be reimbursable if they are by approved consultants. Under the scheme reimbursement available of charges for acquiring ISO-9000/ISO-14001/HACCP certifications to the extent of 75% of the expenditure subject to a maximum of Rs. 75,000/-.

Market Development Assistance (MDA) Scheme: The government of India under this scheme offers funding for participation by registered manufacturing Micro & Small Enterprises in International Trade Fairs/Exhibitions under MSME India stall. Reimbursement eligibility is of 75% of airfare by economy class and 50% space rental charges under General category entrepreneurs and for women/SC/ST entrepreneurs & entrepreneurs from North-Eastern Region, up to 100% of space rent and economy class airfare. The total subsidy is restricted to Rs.1.25 lakh per unit.

Bar Code registration subsidy: Bar Coding not only facilitates the exchange of information between buyers and sellers but also provides the potential for better visibility and sharing of information across an entire Supply Chain. Enterprises that have MSME Registration can avail of Bar Code Registration subsidy which envisages providing 75% of the one-time registration fee and annual recurring fee (for the first three years) paid.

Subsidy on Credit ratings: NSIC is the nodal agency for implementing the scheme of performance and credit rating for Micro & Small Enterprises. Enterprises that have MSME Registration can avail Subsidy on NSIC Performance and Credit ratings. Under this Scheme, the rating fee payable by the micro and small enterprises is subsidized for the first year only and that is subject to a maximum of 75% of the fee or Rs. 40000/- whichever is less. More than 30 banks / financial institutions have signed MOU with the Rating Agencies / NSIC to extend the benefits to the units rated under the Scheme.

Access to Tenders: The Government comes out with tenders that are open only to MSMEs with an objective to promote MSMEs in India. Further, the Government has decided that global tenders will be disallowed in procurement up to Rs 200 crores.

 15% subsidy under Credit Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradations: The objective of the scheme is to facilitate technology up-gradation in Micro and Small Enterprises (MSEs) by providing an upfront capital subsidy of 15 percent (limited to a maximum Rs.15 lakhs) on institutional finance of up to Rs 1 crore availed by them, for induction of well-established and improved technology in the specified 51 sub-sectors/products approved. In essence, the major objective is to upgrade their plant & machinery with state-of-the-art technology, with or without expansion, and for new MSEs which have set up their facilities with appropriate eligible and proven technology duly approved under scheme guidelines. The list of Technologies is available at Online Application and Tracking System has been introduced w.e.f. 01.10.2013. To claim subsidy under CLCSS, eligible MSEs are required to apply online through Primary Lending Institutions (PLIs), from where the MSEs avail term loan.

Public Procurement Policy for MSEs: Every Central Ministry /Department / PSU shall set an annual target for 25% procurement from MSE Sector. A sub-target of 4% out of 25% target of annual procurement earmarked for procurement from MSEs owned by SC/ST entrepreneurs. Overall procurement goal of a minimum 25% has become mandatory from 1st April 2015. Tender sets are free of cost and exempt from payment of earnest money to registered MSEs. MSEs quoting price within price band L-1 + 15%, when L1 is from someone other than MSE, shall be allowed to supply at least 25% of the tendered value at L-1 subject to lowering of price by MSEs to L-1. 358 items are reserved for exclusive procurement from MSEs.

 Availing Invoice payment by MSMEs under TReDS platform: TReDS (Trade Receivables Discounting System) is an institutional mechanism set up to facilitate the discounting of invoices for MSMEs from corporate buyers through multiple financiers. Invoice discounting on TReDS involves three participants MSME Supplier, Corporate Buyer, and Financier. The invoice is uploaded by either buyer or supplier depending on the method of discounting and is approved by the other party. Once the invoice is approved the financiers on the platform start to bid on the invoice. The supplier accepts the bid, and the discounted amount is credited in its account in T+1 day, where T is the day of acceptance.

Raw material Assistance Scheme aims at helping MSMEs by way of financing the purchase of Raw Material (both indigenous & imported). This gives an opportunity to MSMEs to focus better on manufacturing quality products. Entrepreneurs and any MSME needing raw material through National Small Industries Corporation (NSIC) may apply to any of the NSIC field offices for Raw Material Assistance in the prescribed application forms, which can be downloaded from NSIC’s website ( Any manufacturing MSME having a Udyam Registration number can apply for assistance under the Scheme. More details can be found at:

  As per data available on the Government website, as of 29th December 2021(3 pm), the total registered MSMEs are at 63,40,898. This is as compared to my earlier Blog, which gave the data as of 30th September 2021(11 am), for the total registered MSMEs at 50,14,706. There is an addition of 13,26,192 in about a 3-month period. Looking at 63 million MSMEs in the country as per MSME Ministry report 2019-20, the MSMEs must pace up for getting the Udyam Registration number. GoI has simplified the registration process for MSMEs with zero fees for the registration on their website.

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