Fadnavis rejects ‘industrial exodus’ narrative, says 76 pc of 36,211 company closures were defunct entities

Mumbai, Aug 14 (IANS) Maharashtra Chief Minister Devendra Fadnavis on Friday strongly refuted claims that the closure of 36,211 registered companies in the state over the past five years reflected an industrial slowdown or large-scale corporate migration, asserting that the majority of those entities were inactive firms removed as part of routine regulatory clean-up exercises.

Responding to opposition criticism based on data presented in Parliament by the Ministry of Corporate Affairs (MCA), the Chief Minister said that nearly 76 per cent of the deregistered companies were non-operational or “defunct” entities that had either ceased functioning or never commenced business activities.

Reaffirming Maharashtra’s market leadership, the Chief Minister cited official metrics showing the state retains the highest number of active companies nationwide (3,96,211) and continues to top the country in fresh incorporation rates. He remarked that the social media commentary and select media outlets interpreted the metric as a mass exodus or shutdown of operational businesses within the state.

In a detailed clarification posted on X, Fadnavis argued that the closure figures were being misrepresented as evidence of an industrial exodus from Maharashtra, whereas they largely reflected periodic compliance-driven removal of dormant firms from official records. He noted that 12 per cent of the closed entities were merged with larger corporate structures, two per cent underwent formal liquidation, while the remaining 10 per cent were struck off for other regulatory reasons.

“Official data indicates that 76 per cent of closed registrations belong to defunct companies — entities that were non-operational or never commenced business activities, 12 per cent amalgamations (merged into larger corporate structures), 2 per cent formal liquidation (wound down businesses), and 10 per cent other regulatory compliance strikes. Under national economic growth frameworks, active company registrations across India have expanded significantly, including 2015–16: 6,78,768 active companies, 2025–26: 21,17,747 active companies (over a 3x increase),” he said.

The debate ensued after Lok Sabha MP Rajabhau Waje received a parliamentary response from Union Minister of State for Corporate Affairs Harsh Malhotra, revealing that 36,211 private companies in Maharashtra closed over the last five years.

Rebutting political interpretations of a “mass shutdown,” CM Fadnavis emphasised, “MCA periodically de-registers inactive businesses. Nationwide, routine special drives (such as in 2019–20, when 6 lakh defunct firms were struck off) account for bulk numerical drops rather than actual commercial exits. Annual corporate deregistration across India averages 20,000 to 22,000 entities.”

Highlighting expansion metrics, CM Fadnavis pointed out that active corporate entities across India have grown threefold — from 6.78 lakh in 2015–16 to over 21.17 lakh in 2025–26. He claimed that cancellation of registration is a routine MCA compliance metric for inactive entities, not a measure of active manufacturing units leaving the state. Maharashtra remains first in active companies, 3.96 lakh plus, and leads new company formations nationwide, 41,525 in 2025–26.

CM Fadnavis said that approximately 1 lakh new companies register annually in India, with Maharashtra leading state-level additions comprising 41,525 [Rank 1], Uttar Pradesh: 27,494, Delhi: 20,272, Karnataka: 17,857, Telangana: 17,300, Tamil Nadu: 17,024, Gujarat: 14,666 and West Bengal: 10,598.

Addressing ground-level operational friction in Pune district’s Chakan industrial belt, where Sharad Pawar flagged that 20 units employing ~2,000 workers were weighing relocation due to severe traffic, power, and road bottlenecks, the Chief Minister outlined direct administrative interventions. Following a high-level MIDC-led review on August 12 involving Pune Metropolitan Region Development Authority (PMRDA), Public Works Department (PWD), National Highway Authority of India, Zilla Parishad, and district authorities, State Industries Minister Uday Samant has been tasked with directly supervising targeted infrastructure fixes, said the CM.

He stated that in the Chakan industrial belt, the pothole repair, road widening, and traffic decongestion projects will be taken up for execution on a priority basis post-monsoon. The government has proposed to convert key industrial zones, including Chakan, into dedicated Industrial Townships to enable unified civic and operational management. Plans are underway for Chakan Phase-6 development to cater to surging demand, backed by over 500 new industrial investments secured over the last three years.

The Deputy Chief Minister and Pune district guardian minister Sunetra Pawar said, “Problems in Chakan MIDC are to be resolved on a priority basis. The issues related to roads, traffic, and other infrastructure facilities in Chakan MIDC will be addressed on a priority basis. A meeting will soon be held with entrepreneurs from Chakan, senior MIDC officials, local administration, and district administration to promptly find solutions to these problems. In this regard, a detailed discussion was held with Dhananjay Shedge, representatives of the Chakan Citizens’ Action Committee and industrial organisations. The problems faced by entrepreneurs were understood, and they were assured of the necessary actions to resolve them.”

She further stated, “In connection with these issues, necessary instructions have been given to MIDC’s Chief Executive Officer Deependrasingh Kushwaha, Pune District Collector Jitendra Dudi, PMRDA Commissioner Abhijeet Chaudhary, Pune Zilla Parishad Chief Executive Officer Gajanan Patil, Pimpri-Chinchwad Police Commissioner Vinay Kumar Chaube, Khed Sub-Divisional Officer Anil Daunde, and Chakan Municipal Council’s Chief Officer Ankush Jadhav.

Strengthening infrastructure facilities is a priority to boost industrial development in Chakan. By taking all stakeholders into confidence and through coordinated efforts, concrete solutions to these problems will be found soon.”

Earlier, NCP (SP) chief Sharad Pawar urged the state administration to treat infrastructure deficits in Chakan and Talegaon on a “war footing,” warning that corporate displacement damages the state’s historical legacy as India’s manufacturing powerhouse.

“Maharashtra has always been an industry-friendly state. Industries relocating or shutting down due to infrastructure failure is not a matter of pride. Leaders across party lines must uphold the legacy of an industrially advanced Maharashtra established by the late Yashwantrao Chavan,” said Pawar in his social media post.

Pawar demanded a single-window grievance mechanism alongside high-level summits between entrepreneurs and state agencies to resolve ground bottlenecks swiftly.

–IANS

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