In a significant push toward formalizing the informal economy, the Central Government has urged all states and union territories to expedite the identification and registration of unlisted sole proprietors. The directive, issued jointly by the Ministry of MSME and the Ministry of Labour and Employment, calls for coordinated action by local authorities, industry departments, and municipal bodies to bring lakhs of informal sole traders, who currently operate without official recognition, into the formal economic framework.

The government has emphasized that many of these unregistered sole proprietors, such as street vendors, local service providers, artisans, and micro-retailers, are missing out on crucial benefits available under schemes like Udyam Registration, MUDRA loans, e-Shram enrolment, and GST composition schemes. To correct this, states have been instructed to conduct door-to-door surveys, launch mobile registration vans, and organize camps in high-density commercial areas to actively enroll such businesses. A simplified digital registration process with Aadhaar and PAN integration is also being promoted to reduce paperwork and speed up onboarding.

Officials have highlighted that registering unlisted sole proprietors will not only enable them to access government support programs, credit facilities, and insurance schemes but will also improve the quality of economic data used for policymaking. Once registered, these businesses will also become eligible for training, marketing grants, and legal protections under MSME laws. Trade bodies and local chambers of commerce have welcomed the move, stating it will increase visibility and opportunity for small entrepreneurs who are often the backbone of regional economies but lack formal status. The government has set a target to register at least one crore unlisted sole proprietors within the current financial year.