Corona hits economy, huge decline in registration of new companies

New Delhi: The first clear indication of the impact of the Corona epidemic on the economy is that since February 2020, there has been a huge decline in the registration of new companies. Data from the Ministry of Corporate Affairs (MCA) shows that most entrepreneurs have withheld capital that could be at risk and are hesitant to invest in new ventures.

A total of 3,209 new companies were registered in the MCA in April 2020. In April 2019, 10,383 companies had registered, that is, compared to last year, it is a drop of 70 percent in the registration of new companies. MCA data show that the sharp decline in registrations of new companies began in February this year and accelerated this decline with the spread of the coronavirus over the next two months. In March, when the first lockdown was announced, new companies Registration has reduced to 5,788.

The following month the figure came down to 3,209, a decline of 45 per cent. Similarly, 'Limited Liability Partnership' (LLP), an alternative corporate structure known for relatively low regulatory accountability, has also declined. A total of 4,186 LLPs were registered in MCA in April 2019. However, uncertainties related to Corona reduced the number to 574 in April 2020 - 86 percent less than the same period last year.

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