Registered Is Not the Same as Employed, and Employed Is Not the Same as Created

The Parliamentary Statement

IANS reported on 12 March 2026 that Union MSME Minister Jitin Ram Manjhi, replying to a question in the Lok Sabha, said about 7.83 crore MSMEs had registered on the Udyam portal since 2020. He reported total employment of 34.50 crore as of 28 February 2026. The headline of the report called this "jobs created", but the article itself described it as total employment on the portal. The report also said about 1.37 lakh MSMEs had shut down in the same period, and that deregistration reasons included change of owner, certificate no longer required, duplicate registration, shutdown and other. The article described the shutdown figure as 0.17% of closed MSMEs, a phrase that does not make clear what it is a percentage of; we do not reproduce the percentage as a finding.

Three distinctions worth making: our analysis

1. Registrations are not active businesses. Udyam registration is self-declared and free, and a business may register to claim benefits, to satisfy a buyer or to access credit. Duplicate registrations and changes of ownership appear among the stated reasons for deregistration, which shows the register is not a clean census. 2. Total employment is not job creation. A figure of 34.50 crore describes how many people are reported as employed in registered units on a date. It does not say how many are new jobs, how many are part-time or how many have formal contracts. Using it as "jobs created" overstates what it shows. 3. A small closure count may reflect reporting. Only 1.37 lakh shutdowns against 7.83 crore registrations looks tiny, but many failed firms may never tell the portal. The count shows reported deregistrations, not the real exit rate.

“A register is a list of names; an economy is a list of what they do.”

Why this matters to an employer

If you hire, you will see these numbers quoted in discussions on policy and skills. Understanding their limits helps you avoid forming a wrong picture of the labour market. A large headline employment figure says little about whether the person you want to hire is available.

What to look for in better data

• Flows. New hires and separations per quarter. • Quality. Share of workers with written contracts, social security coverage and minimum pay. • Size. Distribution of employment between micro, small and medium units. • Survival. How many units registered in a given year are still operating after one, three and five years. Some of this is available from labour force surveys and provident-fund and insurance records, and a careful reader will combine sources.

What small employers can do about formality

1. Keep your registration current and accurate. Update the details if ownership, activity or size changes, and avoid duplicates. 2. Document employment. Appointment letters, wage records and statutory registrations protect you and the employee. Check what applies at your size under current labour rules. 3. Use registration to your advantage. A correct Udyam record supports applications for credit and schemes, and underpins the protection under the payment rules described in our Finance pieces. 4. Report closures properly. If you shut a unit, deregister it correctly to avoid inflated statistics and potential complications.

A caution on interpreting a single reply

A written or oral reply in Parliament reflects what the Ministry chose to state at that time. We saw only a wire summary, not the full text. If you need the figures for a report, obtain the original and note the date.

For journalists and researchers

Distinguish "registered", "active", "employed" and "created" in headlines. The difference between a stock and a flow is the difference between a snapshot and a trend.

An invented example of the stock-versus-flow problem

Imagine a district with 1,000 registered units reporting 5,000 employees at the start of the year. During the year, 200 units close without telling anyone, 150 new units register and total reported employment remains 5,000 because the register has not been updated. A reader would see steady employment, while in reality hundreds of jobs vanished and others appeared. The numbers are invented only to show why a snapshot can hide movement.

What a careful reader does

Ask when the figure was recorded, who reports it, how often it is updated and whether the same person can be counted in two units. Compare with an independent source such as a labour force survey. Prefer trends over single numbers. And remember that a large number is not automatically a good number: 34.50 crore people employed in small units says nothing about their wages, safety or security. Editorial analysis based on IANS, 12 Mar 2026, reporting a Lok Sabha reply. Our distinctions and guidance are labelled as such.