Indians Registered 16,600 New Businesses In 30 Days: 26% Jump In Entrepreneurship YoY

According to data from the corporate affairs ministry, more than 16,600 businesses were registered in June. Is this a glimpse of ‘Achche Din’?

Improvement In Entrepreneurship

The data represents a 26% year-on-year jump and further indicates that entrepreneurship is picking up even as the second wave of the pandemic is abating.

Out of the businesses incorporated in June, 12,722 were new companies.

While 3,940 were limited liability partnerships (LLPs), which is considered to be a more flexible business vehicle preferred by the service sector.

Compared to May, there has been a 16.7% jump in the incorporation of businesses in June.

As 14,269 businesses were registered, also including companies and LLPs.

How Does It Affect?

Usually, incorporation of a new business indicates investment intent along with a potential increase in economic activity.

Although, a host of variables could influence the actual investments into these business vehicles.

It is noteworthy here that some of the businesses may be incorporated merely for the ownership of assets.

Robust Trend In Registering Business

Earlier, in April 2020, the registration of new companies and LLPs had seen a sharp drop as a result of the nationwide lockdown imposed to contain the spread of the coronavirus.

Which seems to be recovered from June. Although the final figures for May show a little drop.

But no worries there as the overall trend so far has been of robust activity in registering businesses in the first quarter of FY22 compared to a year ago.

The results also indicate that the second covid wave had a muted impact on entrepreneurship.

Considering the sales in May, the restrictions imposed in various parts of the country during the second wave had also led to a slight drop in the goods and services tax (GST) collections reported in June.

To be specific, the GST collected in June had dropped below Rs 1 lakh crore after staying above that level for eight consecutive months, according to the official data of the month.