Cabinet gives Rs 6,062 cr booster to COVID-19 hit MSMEs via World Bank-assisted scheme

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved $808 million (Rs 6062.45 crore) for a World Bank assisted programme on “Raising and Accelerating MSME Performance” (RAMP).

According to a statement by the government, out of the total Rs 6062.45 crore, Rs 3750 crore or $500 million would be a loan from the World Bank, while the remaining Rs 2312.45 crore or $308 million would be funded by the Government of India. 

The government is specifically targeting over 5 lakh MSMEs to gain benefit from the scheme. The government also claims that directly or indirectly 63 million businesses will be impacted which fall under the MSME category.

Hailing this move, the Prime Minister tweeted,

RAMP is a World Bank assisted central sector scheme that is slated to commence in FY23. The aim of this scheme is to improve access to market and credit, strengthen institutions and governance at the Centre and State, improve Centre-State linkages and partnerships, address issues of delayed payments and greening of MSMEs, and more.

The programme will also address the COVID-19 related challenges faced by this sector and will take measures to strengthen the existing capacities, enhance their competitiveness, increase exports, reduce imports, etc.

"In states where the presence of MSMEs is on the lower side, the programme will usher in larger formalization resulting from the higher impact of the schemes covered under RAMP. The SIPs developed by these States would act as a roadmap for the development of an improved MSME sector," the statement from the ministry read.

The funds of the scheme will flow through into the Ministry’s budget against the following Disbursement Linked Indicators (DLIs):

• Implementing the National MSME Reform Agenda.

• Accelerating MSME Sector Centre-State collaboration.

• Enhancing the effectiveness of Technology Upgradation Scheme (CLCS-TUS).

• Strengthening Receivable Financing Market for MSMEs.

• Enhancing Effectiveness of Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) and “Greening and Gender” delivery.

• Reducing the incidence of delayed payments.

RAMP was devised by GoI, for strengthening the MSMEs of the country in line with the recommendations proposed by the UK Sinha Committee, KV Kamath Committee, and the Economic Advisory Council to the Prime Minister (PMEAC).