The Cabinet of the Union on Wednesday approved a World Bank-assisted Rs 6,062 crore financing package for small and medium enterprises to help them improve their access to market and credit.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved Rs 6,062.45 crore or USD 808 million Raising and Accelerating MSM Performance (RAMP) for Micro, Small and Medium Enterprises (MSMEs) ), a statement official said.
RAMP will begin in FY23, he said.
Of the total program expenditure, Rs 3,750 crore ($500 million) will come from a loan from the World Bank, and the remaining Rs 2,312.45 crore will be funded by the central government.
RAMP will work under the Ministry of MSMEs (MoMSME) for resilience and recovery interventions after the coronavirus disease.
“The program aims to improve access to market and credit, to strengthen institutions and governance at the Center and at the State, to improve links and partnerships between the Center and the State, to solve the problems of payment delays and greening of MSMEs.In addition to building the capacity of MoMSME at the national level, the RAMP program will seek to increase the implementation capacity and coverage of MSMEs in the states,” the statement read.
The government has formulated and proposed the RAMP to strengthen MSMEs as recommended by the UK Sinha Committee, KV Kamath Committee and the Prime Minister’s Economic Advisory Council (EAC-PM).
The RAMP program with impacts across the country will directly or indirectly benefit all $6.3 billion businesses in the MSME category.
A total of 5,55,000 MSMEs are specifically targeted to improve their performance. In addition, expanding the target market to include service sectors and increasing around 70,500 female MSMEs is envisaged, according to the statement.
RAMP has identified two result areas after missions and preliminary studies, the first is to strengthen the institutions and governance of the MSME program and the second is to support market access, business capacities and access to finance .
“Funds would flow through RAMP in the Ministry’s budget against disbursement-linked indicators (DLIs) to support ongoing MoMSME programs, focusing on improving market access and competitiveness.”
Disbursement of World Bank funds to RAMP would be made upon achievement of DLIs such as implementation of the national MSME reform program, acceleration of collaboration between the center and the state of the MSME sector, improving the effectiveness of the technology upgrading program (CLCS-TUS).
The government has stated that the program will prepare Strategic Investment Plans (SIPs) in which all States and Union Territories will be invited.
The SIPs would include an outreach plan for identifying and mobilizing MSMEs under the RAMP, identify key constraints and gaps, set milestones and project budgets required for interventions in priority sectors, including renewable energy , rural and non-farm enterprises, wholesale and retail trade. , village and cottage industries, women’s enterprises, among others.
The Higher National Council of MSMEs, headed by the Minister of MSMEs, will oversee and oversee the policy overview of RAMP.
A RAMP program committee headed by the MoMSME secretary will oversee specific deliverables, the government said.
For day-to-day implementation, there would be Program Management Units at the National and State level, comprised of professionals and experts competitively selected from the industry to support MoMSME and the States, to implement implement, monitor and evaluate the RAMP program, according to the release.
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