In 2023-24, 16.3% more companies and 62.7% more LLPs were incorporated than in the previous year, a reflection of the growing optimism about the country’s growth prospects over the medium to long term despite external headwinds. A record 185,314 companies and 58,990 LLPs were incorporated in 2023-24.
Steps to ease compliance burden and promote ease of doing business are also driving record incorporations, officials said. “There were record company incorporations in FY24, so there would be a high base effect for calculating growth this fiscal. Moreover, this is election time, so some entrepreneurs may have deferred incorporation. So, it’s likely that company registrations will rebound after the election,” said an official, who did not wish to be identified.
As for the continuing increase in LLP incorporations, officials said it reflects robust prospects of services trade, both internal and external, and the booming services economy. The record incorporations in 2023-24 happened despite complaints of technical glitches involving the latest version of the MCA21 portal for corporate filings and amid a continued crackdown on shell companies.
The International Monetary Fund last month raised India’s 2024-25 growth forecast by 30 basis points (0.3 percentage points) to 6.8%. Although the pace of expansion could moderate from an estimated 7.8% in the previous fiscal, India will continue to be the world’s fastest-growing economy this year, the multilateral body said.As per the statistics ministry’s second advance estimate released in February, India is expected to have grown at a higher than anticipated pace of 7.6% in 2023-24.
