Union Finance Minister Nirmala Sitharaman, on August 21, 2021, while addressing the launch of the 'Ubharte Sitaare Fund' in Lucknow, claimed that Uttar Pradesh has the highest number of micro, small and medium enterprises (MSMEs). The fund, set up by Exim Bank and SIDBI, aims at arranging funds for promotion of MSMEs.
Smt @nsitharaman addresses the audience at the launch of 'Ubharte Sitaare Fund' in Lucknow. The Ubharte Sitaare Fund will go a long way in making India a major exporting hub. The fund was announced by the hon'ble FM in her budget speech in 2020. pic.twitter.com/TQmifZqwUz— NSitharamanOffice (@nsitharamanoffc) August 21, 2021
"Uttar Pradesh has the highest number of MSMEs and has effectively implemented the One District One Product programme, which provides the ideal ecosystem for success of an initiative like the Ubharte Sitaare Fund," tweeted the finance minister's office.
When it comes to number of registered MSMEs, UP has a total of 12,78,072 MSME units registered, which means it has the third-highest number of registered MSMEs in the country, according to data shared by Union Minister of Micro, Small & Medium Enterprises Narayan Rane in Lok Sabha on July 29, 2021. With more than 28.38 lakh MSMEs registered, Maharashtra tops the list, followed by Tamil Nadu with 15,40,859 MSMEs.
According to Udyog Aadhaar Portal (since inception — October 2015 — to June 2020), the number of MSMEs registered in UP was more than 9.7 lakh. On July 1, 2020, after revising the definition of MSMEs, a new registration portal 'Udyam Registration' was launched by the MSME Ministry and between July 1, 2020 and July 15, 2021, 39, 92,182 MSMEs have been registered in the country. Of these, 2,81,181 classified and 26,097 unclassified MSMEs have been registered in UP. If the number of registrations done in the last year is considered, Uttar Pradesh fares fifth on the list.
But, according to the MSME Ministry's Annual Report 2020-21, Uttar Pradesh does top the list of estimated MSMEs "with a share of 14.20% of MSMEs in the country". Data in this annual report is sourced from the National Sample Survey's (NSS) 73rd Round (July 2015-June 2016 ). That's the NSS' latest report on "unincorporated non-agricultural enterprises (excluding construction)". The NSS comes up with a report every five years (since the one before 2015-16, was based on data from 2010-11), but no such report has been released for 2020-21. According to the 2015-16 NSS data, the state has an estimated number of 89.99 lakh MSMEs, followed by West Bengal with 88.67 lakh and Tamil Nadu with 49.48 lakh estimated MSMEs.
According to the revised criteria, a unit with Rs 50 crore of investment and Rs 250 crore of turnover will fall under the 'medium' enterprise category. Whereas, a unit involving not more than Rs 10 crore of investment and Rs 50 crore of turnover will be classified as 'small' and a unit with Rs 1 crore of investment and Rs 5 crore of turnover will be categorised as a 'micro' enterprise.
In the last one year, UP has got 2,65,328 micro, 14,186 small and 1,667 medium enterprises. Overall, over 3 lakh MSMEs have been registered under the new list in the Udyam Registration Portal in UP in the last year.
FactChecker tried contacting Sitharaman via phone calls and email for a clarification on her statement but had not received a response by the time of publishing this article. The story will be updated as and when we get a response.
Editor's Note: This story was originally published on August 23, 2021 and then updated with corrections on August 26, 2021. We regret the error of only verifying Sitharaman's claim against the number of registered MSMEs. We have updated the information above that UP does top the list of estimated number of MSMEs in the country.