Credit and Finance for MSMEs: Prime Minister Narendra Modi on Thursday launched the Rs 6,062.45-crore World Bank assisted central government programme Raising and Accelerating MSME Performance (RAMP) scheme for MSMEs, three months after it was approved by the Cabinet chaired by PM Modi. The five-year RAMP scheme will begin in the current financial year 2022-23 even as it was announced back in 2020 by the government and the World Bank to support Covid-hit MSMEs in their business recovery.
Addressing ‘Udyami Bharat’ programme in New Delhi, PM Modi said, “18,000 MSMEs have been digitally transferred over Rs 500 crore and over Rs 1,400 crore has been released under Rs 50,000 crore Self-Reliant India Fund for MSMEs. MSMEs play a big role in the country’s progress. Around one-third contribution to India’s GDP comes from MSMEs. If India earns Rs 100, Rs 30 is because of MSMEs. Strengthening the MSME sector benefits everyone.”
In her budget speech, Finance Minister Nirmala Sitharaman in February had announced the rollout of the programme in the coming five years. Out of the total scheme’s outlay, World Bank had approved Rs 3750 crore in June last year. The remaining Rs 2312.45 crore outlay would be funded by the government.
In a statement in June 2021, the World Bank had said RAMP targets improvement in the performance of 5.55 lakh MSMEs. RAMP’s monitoring and policy overview would be undertaken by an apex National MSME Council headed by the Minister for MSME, the Cabinet had said in a statement in March this year.
The monetary support will be routed into the MSME Ministry’s budget against ‘Disbursement Linked Indicators’ (DLIs) to support the ministry’s ongoing MSME programmes. The DLIs would include implementing the National MSME Reform Agenda, accelerating MSME sector centre-state collaboration, strengthening the receivable financing market for MSMEs, enhancing the effectiveness of the CGTMSE scheme, and reducing the incidence of delayed payments.
PM Modi also launched the ‘Capacity Building of First-Time MSME Exporters’ (CBFTE) scheme to boost the quality of MSME products and services to match international standards for the global market. The move is intended to help MSMEs improve their participation in the global value chain and realise export potential.
“Whether it is about monetary support, certification-related support, etc., this initiative has been taken to ease the export process for first-time exporters. Irrespective of the size of your product, I would want maximum MSMEs to look at the global market. The work done by our missions in various countries abroad would be evaluated based on three Ts — trade, technology, and tourism,” said PM Modi.
“You (missions) would have to tell the government how much goods that country imported from India, whether any relevant technology of that country was brought to India, and how many people from that country visited India as tourists. Here, MSMEs would have to come forward and inform us of the products needed in that country but if they don’t then our missions would not be able to help, added PM Modi.
MSMEs’ share in India’s exports has been around 48 per cent for the past few years. In FY22, India saw a strong rebound in exports to $422 billion vis-a-vis the earlier peak of $330 billion.