The Indian economy has been recovering back to normal, even as new coronavirus cases come down and several promising vaccine candidates get prepared for release. The economic outlook remains uncertain, but there are enough green shoots. One indicator of the nascent recovery is the uptick in the registration of new businesses this year.

Data from the ministry of corporate affairs (MCA) shows that 161,589 companies and limited liability partnerships (LLPs) were registered from January to November 2020. This is an eight percent increase over the corresponding 11-month period of 2019. Between 2014 and 2019, the average year-on-year growth in new registrations was 15 percent. An eight percent increase in the pandemic year is significant.

Leading the growth this year does not state that usually figure at the top, but those that slot in the middle. Further, registrations in the agricultural and manufacturing sectors have shown an increase, while registrations in business services have declined.

If the momentum seen between July and November continues into December, the final figure for 2020 could creep into double-digits.
The top five states by registrations—Maharashtra, Delhi, Uttar Pradesh, Karnataka, and Telangana—grew a modest three percent in 2020. Delhi declined four percent. These states suffered greatly due to the covid-19 pandemic and the ensuing lockdown, which might have proven a dampener for new economic activity. By comparison, the next 15 states by registrations logged a 15 percent increase. For example, Gujarat ranked sixth in terms of registrations, recorded a yoy growth of 22 percent.

As expected, much of the growth has come after June. The numbers for the registrar offices in Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, and Mumbai—which accounted for 53 percent of all registrations—were lower year-on-year even in January and February. This possibly reflects the already muted economic sentiment before the pandemic. From March to May, during the hard lockdown, registrations collapsed further. But since July, the six registrars have together shown a 46 percent increase on year.