Udyam Certificate: Promoting Ease of Doing Business in India


India, as one of the fastest-growing economies in the world, has been actively striving to create a conducive environment for businesses to thrive. The government’s commitment to improving the Ease of Doing Business (EODB) has been a central focus, leading to several policy initiatives and reforms. One of the key developments in recent times that highlights this dedication is the introduction of the Udyam Certificate. This certificate aims to simplify the registration process for micro, small, and medium-sized enterprises (MSMEs), fostering their growth and contribution to the Indian economy. In this article, we will explore the significance of the Udyam Certificate, its features, benefits, and its role in promoting ease of doing business in India.

Understanding the Udyam Certificate

The Udyam Certificate, launched in July 2020, is a replacement for the erstwhile MSME registration process, which required businesses to obtain an MSME registration certificate under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006. The introduction of the Udyam Certificate marks a significant shift towards simplification, digitization, and self-declaration for MSME registration.

The Ministry of Micro, Small, and Medium Enterprises (MoMSME) introduced the Udyam Registration Portal, an online platform that streamlines the entire registration process. This initiative aligns with the broader goal of improving India’s ranking in the World Bank’s Ease of Doing Business Index.

Key Features of the Udyam Certificate

Simplified Registration Process: 

The Udyam Certificate eliminates the need for entrepreneurs to undergo a complex and time-consuming registration process. With the introduction of the online portal, businesses can now register and obtain the Udyam Certificate with relative ease and convenience.


Under the Udyam registration process, business owners are required to self-declare their enterprise’s details, including Aadhaar number, PAN number, and other essential information. This self-declaration approach reduces bureaucratic red tape and minimizes the need for extensive documentation.

Aadhaar-based Registration: 

The Udyam Certificate registration process is Aadhaar-based, which ensures authenticity and security. Aadhaar verification streamlines the process, making it efficient and transparent.

Composite Criteria for Classification: 

The Udyam Certificate adopts a composite criterion for classifying enterprises based on their investment and turnover. This single-window approach simplifies the process, allowing enterprises to register seamlessly under the appropriate category: micro, small, or medium.

No Fee for Registration: 

Unlike the previous MSME registration process, which involved a nominal fee, the Udyam Certificate registration is free of cost. This move encourages more businesses to register and formalize their operations without financial barriers.

Benefits of the Udyam Certificate

Access to Financial Assistance: 

Businesses with the Udyam Certificate gain access to various government schemes and incentives, such as credit facilities, subsidies, and assistance programs. This facilitates their growth and development by providing much-needed financial support.

Priority Sector Lending: 

Banks and financial institutions recognize Udyam-registered enterprises as priority sector borrowers, making it easier for them to obtain loans and credit facilities at favorable terms.

Eligibility for Government Tenders: 

Many government tenders are exclusively reserved for MSMEs. By possessing the Udyam Certificate, businesses become eligible to participate in these tenders, creating new avenues for growth and revenue generation.

Protection from Delayed Payments: 

The Udyam Certificate provides businesses with stronger protection against delayed payments, ensuring that they receive their dues on time, which can significantly impact their cash flow and overall stability.

Business Promotion and Marketing: 

The Udyam Certificate enhances the visibility and credibility of registered enterprises. It opens up new marketing opportunities and fosters partnerships with larger corporations seeking to collaborate with reliable MSMEs.

Facilitates Compliance: 

Being a registered MSME through the Udyam Certificate ensures that businesses comply with various laws and regulations, further promoting a business-friendly environment and reducing the burden of legal complexities.

See Also: Update Udyam Certificate


The Udyam Certificate stands as a crucial milestone in India’s pursuit of enhancing the Ease of Doing Business for entrepreneurs and enterprises. By simplifying the registration process, providing numerous benefits, and fostering a conducive business environment, the Udyam Certificate empowers MSMEs to grow, innovate, and contribute significantly to India’s economic development. As more businesses take advantage of this initiative, the nation moves closer to becoming a hub for entrepreneurship and innovation, ensuring a sustainable and thriving economic landscape.

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