New Delhi, Mar 19 (KNN) India has witnessed a sharp rise in the closure of micro, small and medium enterprises (MSMEs) during the 2024-25 financial year, with 35,567 businesses shutting down as of February 28, 2025.
This information was revealed by Minister of State for MSMEs Shobha Karandlaje in a written reply to the Rajya Sabha on Tuesday.
The current year’s closures represent approximately 47.4 per cent of the total 75,082 MSMEs that have ceased operations since the Udyam Portal was launched on July 1, 2020.
This registration platform was established as part of the government’s ease of doing business initiatives. Notably, the number of shutdowns has almost doubled compared to the previous financial year (2023-24), which recorded 19,828 closures.
The data shows a concerning upward trend in MSME failures over the past five years. Beginning with just 175 units closing in FY21, the number increased to 6,222 in FY22, followed by 13,290 in FY23, and 19,828 in FY24.
The current financial year’s figure nearly equals the cumulative total of businesses that shut down during the preceding four years.
Maharashtra has been the most severely affected state in 2024-25, recording 8,472 MSME closures. It is followed by Tamil Nadu (4,412), Gujarat (3,148), Rajasthan (2,989), and Karnataka (2,010).
Minister Karandlaje’s reply did not provide explanations for these closures, despite recent government measures announced in the Union Budget aimed at supporting MSMEs through increased investment and turnover limits, as well as enhanced credit guarantees.
As of February 28, 2025, the total number of MSMEs registered across Indian states and union territories stands at 6.05 crore.
While no data was provided on employment losses resulting from the current closures, a previous statement in July 2024 by Minister for MSMEs Jitan Ram Majhi in the Lok Sabha had indicated that approximately 3.18 lakh jobs were lost due to 49,342 enterprise closures since July 2020.
Minister Majhi had previously attributed these shutdowns to factors such as ‘change in the company owner, certificate not required anymore, duplicate registration, and such other reasons.’
Various reports have also suggested that complex policies, raw material shortages, and lack of skilled labour are among the challenges facing the MSME sector.
(KNN Bureau)
