Categories: Indian Economy

Explained: what is a RAMP scheme for MSME sector

The Raising & Accelerating MSME Performance (RAMP) scheme is a World Bank-assisted program that aims to improve the performance of micro, small, and medium enterprises (MSMEs) in India. The scheme was launched on 30 July 2022 by the Government of India. The total outlay for the scheme is Rs 6,062.45 crore, of which Rs 3,750 crore would be a loan from the World Bank while the remaining Rs 2312.45 crores would be funded by the Government of India. The duration of the scheme is five years from FY22 till FY26.

Following are the objectives of the RAMP scheme

  1. Improving access to market and credit for MSMEs
  2. Strengthening institutions and governance at the central and state levels
  3. Improving center-state linkages and partnerships
  4. Addressing issues of delayed payments
  5. Greening of MSMEs

The scheme envisages MSME units to have increased access to markets and credit, improved access to technology and training, reduced delays in payments, and increased environmental sustainability.

Improved access to markets: Under the RAMP schemes, MSMEs are supported for market research, product development, and export promotion which also will help MSMEs to access new markets.

Improved access to credit: Under the RAMP scheme MSME units will be provided with guarantees and collateral support. This will make it easier for MSMEs to obtain loans from banks and other financial institutions.

Strengthened institutions and governance: The RAMP scheme strengthens the institutions and governance of the MSME sector by providing support for capacity building, training, and reforms.

Reduced delays in payments: The RAMP scheme will help to reduce delays in payments to MSMEs by providing support for the development of payment systems and dispute resolution mechanisms. This will help MSMEs to improve their cash flow and financial health.

Increased environmental sustainability: The RAMP scheme encourages MSME units to become more environmentally sustainable by providing support for the adoption of green technologies and practices. This will help MSMEs to reduce their environmental impact and costs.

The government had announced that the financial support under RAMP is routed into the MSME Ministry’s budget against ‘Disbursement Linked Indicators’ (DLIs) to back the ministry’s various MSME programmes. The DLIs would be the National MSME Reform Agenda, accelerating the MSME sector center-state collaboration, strengthening the invoice discounting market for MSMEs, boosting the effectiveness of the CGTMSE scheme, etc.

Surendra Naik

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Surendra Naik

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