Cabinet approves $808 million World Bank-assisted programme for MSMEs

New Delhi, March 30

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The government on Wednesday approved a World Bank-backed programme worth USD808 million for assisting and improving the functioning of Micro, Small and Medium Enterprises (MSMEs) in the country.

A decision in this regard was taken at a meeting of the Union Cabinet, chaired by Prime Minister Narendra Modi, which envisages a programme called ‘Raising and Accelerating MSME Performance’ (RAMP) and is supported by a World Bank-assisted central sector scheme, the government said in an official statement, which went on to add that it would support various COVID-19 pandemic-related resilience and recovery interventions of the enterprises and it would commence in financial year 2022-23.

Of the USD808 million, USD500 million will be a loan from the World Bank, while the remaining $308 million will come from the Centre, it said, adding that the loan from the World Bank’s International Bank for Reconstruction and Development is for 18.5 years, which includes a grace period of 5.5 years. The programme was approved by the World Bank’s Board of Executive Directors on June 4, 2021.

“The programme aims at improving access to market and credit, strengthening institutions and governance at the Centre and state, improving Centre-State linkages and partnerships, addressing issues of delayed payments and greening of MSMEs,” it read.

The RAMP programme will also seek to scale up implementation capacity and MSME coverage in states. It will address the generic and COVID-related challenges in the MSME sector by way of impact enhancement of existing MSME schemes, especially on the competitiveness front.

“Further, the programme will bolster the inadequately addressed blocks of capacity-building, hand-holding, skill development, quality enrichment, technological upgradation, digitisation, outreach and marketing promotion, amongst other things,” the government said in the statement.

The programme, through collaboration with states, will act as a job-enabler, market promoter, finance facilitator, and will support vulnerable sections and greening initiatives.

RAMP was formulated and proposed by the government for strengthening MSMEs in line with the recommendations made by UK Sinha Committee, KV Kamath Committee and Economic Advisory Council to the Prime Minister (PMEAC), it added.