Kochi/Thiruvananthapuram: The Kerala Government had launched 'One lakh enterprises a year' programme at the start of the current fiscal year with much fanfare. Almost a year later, the programme which had for its goal creation of more than 2 lakh job opportunities and bringing in Rs 7,000 crore in investment has become an embarrassment as the list on the number of new enterprises registered during this period was found inflated with irrelevant or old establishments.
The list included those who have been doing business for years together as well. Several of the small-scale traders doing business in Kerala for years also made it to the list. Except for a few enterprises, none of the rest have become a reality.
How did such old ventures make it to the list? The Centre's "Udyam" portal had come in handy for the Industries Department to garner the data. The Industries Directorates of States have the permission to collect data from the Udyam portal. All those who have investments in the country and those who begin new enterprises must register themselves on the Udyam portal of the Central government for obtaining subsidies, loans and tax concessions. Only the Aadhaar number is needed for the purpose and it is not mandatory that an enterprise should be started.
Mandatory registration on Udyam portal
Udyam registration is mandatory for priority lending by banks to small-scale industries (SSIs). Entrepreneurs who took bank loans based on Udyam registration were included as new investors in the list of new enterprises as claimed by the Kerala Government. Also, Kerala-based Micro, Small and Medium Enterprises (MSMEs) too which are registered on the portal were added to the list. The loans advanced to these entities were portrayed as new investments in Kerala!
The banks have targets for priority lending. A new regulation came into existence in 2020 that if the Reserve Bank of India (RBI) was to consider MSMEs for priority lending, then the beneficiaries availing the loan should have done the Udyam registration. However, banks started enforcing the provision only last year. Though hundreds of new registrations were done, the list of new enterprises mostly featured existing business establishments which were availing loans for years altogether. There is neither new investment nor new employment opportunity in them.
Earlier, the Udyog Aadhar Memorandum (UAM) was the Central portal to register the MSMEs. In Kerala, 1,42,924 entrepreneurs had earlier taken this registration. The Centre, from July 2020, started the Udyam registration instead. From then on, the total Udyam registration in Kerala including the old UAM registrations stands at 3,44,435; but half of them are old business ventures.
Of them, 3,31,016 enterprises are in the Micro Industries category. In the Small Industries section, there are 12,598 entities and in Medium-Sized Industries Section there are only 965 institutions. Trading entities were allowed Udyam registration from July 2021.
The total number of institutions registered in the trading category so far in Kerala is 73,440.
Business owners have no clue on listing
Business owners have no idea how their businesses were included in the list. For instance, ‘ESPI Fast-food’ was set up in December 2021 at Olathanni in Neyyatinkara but was included in the list of new entrepreneurial ventures. Its owner Soman alleged he didn’t receive any help from the interns appointed by the Industries Department when he approached them seeking assistance in availing loan to run his business.
Since self-employment comes under the scope of an ‘enterprise’, Soman submitted an application after he came to know about the subsidy from the block panchayat. They even promised to extend him one. However, no assistance was provided when he went to the bank.
The name of an entrepreneur, who was forced to visit various government offices numerous times for obtaining a license, too has got featured in the list. Pala native P N Manoj applied for a new licence after the enterprise he was running for the last 10 years got gutted in a major fire. Surprisingly, his name too was included in the list.
Interns do the trick
The interns appointed by the Industries Department in local self-Governing bodies institutions enlisted several business people to inflate the list.
The Department deployed one intern for one panchayat and one for every 20 wards of corporations and municipalities. A total of 1,153 interns were appointed across the state. They were given a huge target of registering 1.50 lakh new ventures; this means a single person has to register up to 150 new enterprises. In certain districts, the target was 180 ventures for a single person.
The main responsibility of interns is to extend necessary guidance to aspiring entrepreneurs and to assist them in all ways to start their own business ventures. They should also help the latter in availing of funds. However, in their effort to meet the target, many interns included in the list of new enterprises those taking licences from local-self bodies and existing entrepreneurs in need of loans.
