Micro, Small and Medium Enterprises (MSMEs) serve as the growth accelerators of the Indian economy, contributing about 30% to the country’s Gross Domestic Product (GDP) and 48% of the total exports. MSMEs play a crucial role in employment generation, providing jobs for approximately 110 million people nationwide. Moreover, more than half of all MSMEs operate in rural India, highlighting their significant role in the rural economy. Recently, the Union Cabinet approved the “Raising and Accelerating MSME Performance” (RAMP) scheme set to commence in fiscal year 2022-23.
RAMP Scheme: A Closer Look
Essentially, RAMP is a World Bank-assisted Central Sector Scheme dedicated to supporting various Coronavirus Disease 2019 (Covid) Resilience and Recovery Interventions of the Ministry of Micro, Small and Medium Enterprises (MoMSME). The scheme is aligned with the recommendations of the U K Sinha Committee, KV Kamath Committee, and Economic Advisory Council to the Prime Minister (PMEAC), and was announced by the finance minister in the Union Budget 2022-23.
Aims and Goals of RAMP
The primary objectives of the RAMP Scheme include improving access to market and credit, strengthening institutions and governance at both Centre and State levels, enhancing Centre-State linkages and partnerships, addressing issues of delayed payments, and promoting greener MSMEs.
Components of the RAMP Scheme
The key component of RAMP is the preparation of Strategic Investment Plans (SIPs), in which all states/UTs will be invited to partake. The SIPs would work towards identifying key constraints and gaps, setting milestones, projecting required budgets for priority sector interventions and so forth. Additionally, an apex National MSME Council will monitor the RAMP scheme and set its policy overview.
Funding and Implementation Strategy
The total budget for the RAMP scheme is Rs. 6,062.45 crore, with Rs. 3750 crore as a loan from the World Bank and the remaining Rs. 2312.45 crore funded by India. Funds would flow through RAMP into the Ministry’s budget, focusing on improving market access and competitiveness.
Benefits of the RAMP Scheme
The RAMP program addresses the generic and Covid-related challenges in the MSME sector by enhancing the impact of existing MSME schemes. The program bolsters inadequately addressed blocks of capacity building, skill development, quality enrichment, and more. Importantly, the RAMP programme aims to generate employment, promote markets, facilitate finance, support vulnerable sections and encourage greening initiatives.
The RAMP Scheme and AtmanNirbhar Bharat Mission
RAMP complements the AtmanNirbhar Bharat mission by fostering innovation and improvement in industry standards and practices, consequently providing necessary technological inputs to the MSMEs.
Significance of MSMEs in the Indian Economy
MSMEs significantly contribute to the Indian economy. They constitute about 30% of the country’s GDP and roughly 48% of overall exports. Besides, MSMEs are significant employment generators, employing around 110 million people nationwide. Notably, over half of the MSMEs operate in rural India.
Related Schemes
Several other schemes aimed at bolstering the MSME sector include the MSME Innovative Scheme, Prime Minister’s Employment Generation programme (PMEGP), Scheme of Fund for Regeneration of Traditional Industries (SFURTI), and Interest Subvention Scheme for Incremental Credit to MSMEs.
Conclusion
Schemes such as RAMP carry immense potential to bolster India’s MSME sector. They can address various challenges faced by the sector, enhance competitiveness, and generate employment, thus playing a key role in propelling the nation towards inclusive growth.