The Ministry of MSME has made the Aadhaar authentication for informal micro units voluntary to encourage informal micro enterprises (IMEs) for Udyam registration to the benefits of priority sector lending (PSL).
MSME Development Commissioner Dr Rajneesh issued the notification regarding this matter on May 22, 2023.
"Having been authorised by the central government, the MSME ministry hereby notifies that Aadhaar authentication of enterprises shall be performed, on voluntary basis, using Yes/No authentication facility, during the process of registration of owners of informal micro enterprises on its digital platform, to facilitate access for availing of priority sector lending," the notification read.
The notification followed the proposal submitted by the MSME ministry to the central government for the Aadhaar authentication "in the interest of good governance, preventing leakage of public funds, promoting ease of living of residents and enabling better access to services for them."
The central government authorised the ministry for the Aadhaar authentication of IMEs in March this year.
During the beginning of the year, the MSME Ministry had launched the Udyam Assist Platform (UAP) to bring IMEs into the formal fold and enable them for PSL.
The platform allows informal units not registered under GST to get a registration certificate from the government based on their information with banks or non-banking financial companies (NBFCs).