Despite the grand scale and crores spent on organizing Vibrant Gujarat, and the state’s claims of major industrial breakthroughs, the ground reality tells a different story.
While the government highlights rising employment opportunities for educated youth, a recent report by the Central Government presents a contrasting picture: over the past five years, nearly 11,000 small and micro industries in Gujarat have shut down.
The findings reveal that closures of small enterprises are accelerating due to inadequate government incentives, resulting in increasing unemployment. Even as Vibrant Gujarat continues to showcase large-scale investments—with red carpets rolled out for big industries slated to begin operations in 2024–25—smaller units struggle to stay afloat. Big companies continue to receive access to premium land and subsidies worth crores, but small and micro enterprises report receiving little to no support, making it harder for them to compete and survive in the market.
According to the Central Government’s own data, 67 small industries shut down in 2020–21. This downward trend has persisted, with the number of closures rising sharply to 3,534 in 2024–25. Over the last five years, a total of 10,948 small industries have closed in Gujarat, leading to job losses for 54,901 people.
Sharp Decline in Udyam Portal Registrations
The crisis is further reflected in registrations on the Udyam portal. In 2023–24, over 13 lakh small industries were registered, but by 2025–26, this number had plummeted to 5,30,160. The dramatic drop reinforces concerns that small enterprises are shutting down at an alarming rate.
While the state government has earned praise for hosting Vibrant Gujarat, its attempt to replicate the model at the district level through “District Vibrant” initiatives has not shown promising results. Observers note that the government’s focus remains fixed on large industries, leaving smaller players increasingly sidelined. The lack of targeted support for the small sector has exposed gaps in the state’s industrial policy, raising questions about its long-term sustainability.
Pointed out Hemant Shah, an analyst of politics and economics, while talking to Vibes of India, “The focus is on big industries when the Vibrant Gujarat Summits are organised. It is shown that small, medium and micro industries are catered to. However, that does actually happen”.
Shah further remarked that since the benchmarks of turnovers for the medium scale industries keep changing, the small scale industries keep losing out.
Gujarat Congress spokesperson, Parthivsinh Kathavadia, told Vibes of India that small scale industries suffer due to policy decisions and that when products are imported from abroad and import duty is done away then the small and medium scale industries are the worst hit. On the other hand, GST is levied on the products produced here, he pointed out.
According to him, during the Congress regime a large number of GIDCs were set up to cater to small and medium scale industries and as against it the number of GIDCs set up during the BJP’s tenure should be seen.
He also said that it is necessary to know which sectors in small scale industries have suffered the most and closed down.
Also Read: Tariffs, War, Weak Demand Rattle Gujarat’s Diamond Industry https://www.vibesofindia.com/tariffs-war-weak-demand-rattle-gujarats-diamond-industry/
