The MSME/Udyam Aadhaar Registration is only needed to avail of benefits, subsidies provided by government to small scale industries and service providers time to time. It is absolutely voluntary.

However, as it is a fairly easy registration to get quickly (provided you have a manufacturing plant or a commercial space where you render services), many business opt for it over other registrations. MSME stands for micro, small and medium enterprises and any enterprise that falls under any of these three categories. MSME enterprises are the backbone of any economy and are an engine of economic growth, promoting equitable development for all.

Therefore, to support and promote MSMEs, the Government of India through various subsidies, schemes and incentives promote MSMEs through the MSMED Act. To avail the benefits under the MSMED Act from Central or State Government and the Banking Sector, MSME Registration is required.