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The Micro, Small and Medium Enterprises (MSME) sector reported employment of more than 8.04 crore people under the UDYAM registration portal during the financial year 2025-26, marking a steady increase over the past three years, the government informed Parliament on Thursday.

In a written reply to a question in the Lok Sabha, Minister of State for Micro, Small and Medium Enterprises Shobha Karandlaje presented the latest employment data captured through the UDYAM registration portal, highlighting a consistent rise in reported employment generated by registered MSMEs across the country.

According to the data, employment reported under the UDYAM portal increased to 8.04 crore in FY2025-26 from 6.91 crore in FY2024-25 and 5.45 crore in FY2023-24. The figures indicate sustained growth in the number of workers employed by enterprises registered under the government's flagship MSME registration platform.

The UDYAM portal serves as the official online registration system for micro, small and medium enterprises and is widely used by businesses to access government schemes, financial assistance, procurement opportunities and other policy benefits.

State-wise data showed that Uttar Pradesh emerged as the largest contributor to MSME employment during FY2025-26, reporting employment of approximately 1.18 crore people. Maharashtra ranked second with 67.97 lakh reported jobs, followed by Tamil Nadu with 61.47 lakh, Telangana with 60.56 lakh and Bihar with 55.54 lakh.

These five states together accounted for a significant share of the employment reported under the UDYAM ecosystem, reflecting the broad geographical spread of MSME activity across manufacturing, services and trading sectors.

The government's data also provided a sector-wise breakup of employment generated by registered MSMEs. Trading emerged as the single largest source of reported employment during FY2025-26, accounting for around 2.98 crore jobs. The services sector followed closely with approximately 2.57 crore reported employees, while manufacturing enterprises accounted for nearly 2.50 crore jobs.

The figures suggest that trading enterprises currently employ a larger workforce within the UDYAM-registered ecosystem than manufacturing units, underscoring the growing importance of commercial and retail businesses in India's MSME landscape.

While the overall trend showed rising employment at the national level, the data also revealed notable declines in reported employment in several states compared with the previous financial year.

 

Andhra Pradesh recorded one of the sharpest declines, with reported MSME employment falling from 70.08 lakh in FY2024-25 to 36.66 lakh in FY2025-26. Karnataka also witnessed a decline, with employment reducing from 65.57 lakh to 50.87 lakh during the same period.

Punjab similarly reported a significant fall in employment, with the number of workers associated with registered MSMEs declining from 28.60 lakh in FY2024-25 to 14.96 lakh in FY2025-26.

The government did not elaborate on the reasons behind these state-specific declines or indicate whether the changes reflected revisions in registration data, enterprise classifications, business closures or other administrative factors.

The parliamentary reply came in response to a broader question seeking information on the sustainability and quality of employment generated by newly established MSMEs. Members had also sought details regarding the survival rate of enterprises, the number of MSMEs that had ceased operations, and state-specific information, particularly for Kerala.

Responding to that aspect of the question, the government said that around 4.61 lakh MSMEs had been registered in Kerala over the last three years. During the same period, 4,252 MSMEs in the state had closed or shut down.

However, the reply did not provide any analysis regarding the reasons for these closures or the survival rate of newly registered enterprises. It also did not include any comparative national data on enterprise closures across other states.

 

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The government further did not offer any assessment of the quality of employment generated by MSMEs. Information relating to wages, job security, formal employment status, social security coverage or working conditions was not included in the response.

Similarly, no separate data was provided on employment generated specifically for young people, women or other demographic groups under the UDYAM registration system.

 

The MSME sector is widely regarded as the backbone of the Indian economy, contributing significantly to manufacturing output, exports and employment generation. Government officials have repeatedly highlighted the sector's role in promoting entrepreneurship, supporting regional economic development and creating livelihood opportunities, particularly in rural and semi-urban areas.

The latest UDYAM figures indicate continued expansion in reported employment among registered enterprises, although experts note that a more comprehensive assessment of job quality, enterprise sustainability and long-term business survival would provide a clearer picture of the sector's contribution to inclusive economic growth.