SRINAGAR: A total of 2,304 micro, small and medium enterprises (MSMEs) in Jammu and Kashmir have shut down over the past five years, affecting businesses registered under the Centre’s Udyam portal, according to data tabled in the Rajya Sabha on Monday. During the same period, the Union Territory registered 8.38 lakh MSMEs, taking the shutdown rate to about 0.27 per cent of all registered enterprises.
The figures, released by the Ministry of Micro, Small and Medium Enterprises, place Jammu and Kashmir among the states and Union Territories with a relatively low proportion of closures despite the challenging business environment in recent years.
The Ministry, however, clarified that the shutdown figures do not necessarily represent business failures alone. Enterprises may be deregistered for several reasons, including closure of operations, change in ownership, duplicate registrations or because registration certificates were no longer required.
Nationally, the Government informed Parliament that 1.42 lakh MSMEs ceased operations between 2021-22 and 2025-26, compared to 8.02 crore enterprises registered on the Udyam portal during the same period. The shutdowns account for only 0.18 per cent of all registered MSMEs.
The Ministry also disclosed that while registered MSMEs currently provide employment to 35.31 crore people, enterprises that shut down during the five-year period accounted for employment of about 10.26 lakh workers.
Among the states, Maharashtra recorded the highest number of MSME closures with 33,906 units, followed by Tamil Nadu (16,687), Gujarat (12,769), Rajasthan (11,279), Karnataka (7,523) and Uttar Pradesh (7,313). Other states reporting significant closures included Madhya Pradesh (6,034), West Bengal (5,587), Telangana (5,248), Bihar (4,969), Andhra Pradesh (4,681) and Kerala (4,250).
In terms of registrations, Maharashtra led the country with 97.19 lakh MSMEs, followed by Uttar Pradesh with 86.42 lakh, West Bengal with 53.63 lakh, Tamil Nadu with 60.74 lakh, Karnataka with 49.59 lakh, Madhya Pradesh with 48.23 lakh, Rajasthan with 43.23 lakh, Bihar with 42.91 lakh, Gujarat with 42.18 lakh, and Jammu and Kashmir with 8.38 lakh registered enterprises.
Replying to questions on the reasons for closures, the Ministry said enterprises are deregistered for multiple reasons and not solely because of financial distress. These include changes in ownership, duplicate registrations, businesses no longer requiring registration certificates and closure of operations. The Government did not attribute the closures specifically to rising input costs, credit constraints or weak market demand.
The Ministry said it continues to support MSMEs through a range of financial assistance and development programmes. These include the Prime Minister’s Employment Generation Programme (PMEGP), the Credit Guarantee Scheme for Micro and Small Enterprises, the Micro and Small Enterprises Cluster Development Programme, Raising and Accelerating MSME Performance (RAMP), the Self-Reliant India (SRI) Fund, PM Vishwakarma, and the MSME Champions Scheme.
It also highlighted several policy measures introduced to protect employment and improve access to finance. During the Covid-19 pandemic, the Government implemented the Rs 5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS), under which 1.13 crore credit guarantees were extended to MSMEs before the scheme closed in March 2023.
Among other measures, MSMEs graduating to a higher category continue to receive non-tax benefits for three years, while the Rs 50,000 crore SRI Fund provides growth capital to eligible enterprises through a combination of government and private investment.
The Ministry also referred to the Vivad se Vishwas initiative, under which MSMEs affected during the pandemic became eligible to receive 95 per cent of forfeited bid or performance security in government contracts.
To improve credit access, scheduled commercial banks have also been directed not to seek collateral security for loans up to Rs 20 lakh extended to micro and small enterprises. The enhanced collateral-free lending limit came into effect from April 1, 2026, doubling the earlier threshold of Rs 10 lakh.
