RAMP Scheme for MSMEs (UPSC Current Affairs)

Relevance: GS2, GS3 - Growth & Development, Planning, Government Budgeting, Inclusive Growth, Government Policies & Interventions

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Why in the news?

• The Union Cabinet recently authorized the "Raising and Accelerating MSME Performance" (RAMP) scheme, which would commence in the financial year 2022-23.
• It is consistent with the recommendations of the U K Sinha Committee, the KV Kamath Committee, and the Prime Minister's Economic Advisory Council.
• In 2019, the Reserve Bank of India established an 'Expert Committee on Micro, Small and Medium Enterprises' chaired by Shri U K Sinha to recommend long-term measures for the economic and financial sustainability of the MSME sector.
• The scheme was announced in the Union Budget 2022-23 by the finance minister.

What is meant by the RAMP Scheme?

It is a World Bank-assisted Central Sector Scheme that supports the Ministry of Micro, Small, and Medium Enterprises' CoronaVirus Disease 2019 (Covid) Resilience and Recovery Interventions.

Aims to

• Improve Market and Credit Access
• Strengthen institutions and governance at the central and state levels
• Improve Centre-State linkages and Partnerships
• Address the issue of delayed payment and greening MSMEs

Components

• The creation of Strategic Investment Plans (SIPs), to which all states/UTs will be invited, is an important component of RAMP.
• The SIPs would include an outreach plan for identifying and mobilizing MSMEs under RAMP, as well as identifying key constraints and gaps, setting milestones, and projecting the required budgets for interventions in priority sectors such as renewable energy, rural and non-farm business, wholesale and retail trade, village and cottage industries, women enterprises, and so on.
• An apex National MSME Council would oversee RAMP's overall monitoring and policy overview.
  • The council will be led by the Minister for MSME and will include representatives from various Ministries, as well as a secretariat.

• Funding: The total cost of the scheme is Rs. 6,062.45 crores, of which Rs. 3750 crore is a World Bank loan and the remaining Rs. 2312.45 crore is funded by India.

Implementation

• RAMP would flow funds into the Ministry's budget based on Disbursement Linked Indicators (DLIs) to support ongoing MoMSME programs aimed at boosting market access and competitiveness.
• The World Bank would make funding available to RAMP if the following Disbursement Linked Indicators were met:
  • Reducing the incidence of delayed payments
  • Implementing the National MSME Reform Agenda
  • Accelerating MSME Sector Centre-State collaboration
  • Strengthening Receivable Financing Market for MSMEs
  • Enhancing the effectiveness of the Technology Upgradation Scheme (CLCS-TUS)
  • Enhancing Effectiveness of Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) and “Greening and Gender” delivery.

What are the advantages of this scheme?

• Addressing MSME Sector Challenges: The RAMP initiative will address generic and Covid-related difficulties in the MSME sector by enhancing the impact of existing MSME schemes, particularly on the competitiveness front.
• Address the inadequately addressed blocks in MSME: The program will strengthen the inadequately addressed areas of capacity building, handholding, skill development, quality enrichment, digitization, outreach, technological up-gradation, and marketing promotion, among others.
• Generate Job Opportunities: RAMP will be a job enabler, market promoter, finance facilitator, and supporter of vulnerable sections and greening initiatives through increased collaboration with states.
• Introduce largerFormalization: In states where the presence of MSMEs is low, the program will usher in large formalization as a result of the greater impact of the RAMP-covered schemes.
• These states' SIPs would serve as a road map for the development of an improved SME sector.
• In addition to the Atmanirbhar Bharat Mission: RAMP will support the Atma Nirbhar Bharat mission by fostering innovation and improving industry standards and practices, as well as providing MSMEs with the necessary technological inputs.

Some Important FAQs