Final call soon for states and UTs to avail of MSME scheme benefits

The Central government is planning to issue a final call to four states and seven Union Territories (UTs) which are yet to submit their strategic investment plan (SIP) to avail funds to revitalise the micro, small and medium enterprises (MSMEs), a senior government official said.

In her 2022 Budget speech, Union Finance Minister Nirmala Sitharaman had announced the Raising and Accelerating MSME Performance (RAMP) scheme as part of the government’s effort to revive the MSME sector after the pandemic shock. All States and UTs were told to develop and submit a strategic investment plan (SIP) to get benefit under the RAMP scheme.

So far, 24 states and one UT, Chandigarh, have submitted their SIPs. But four states and seven UTs haven’t submitted the SIPs.

“MSME Ministry is planning to issue a final call to four states, Chhattisgarh, Jharkhand, Manipur, and Arunachal Pradesh, and seven Union Territories, Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, Delhi (NCT), Jammu and Kashmir, Ladakh, Lakshadweep, and Puducherry, that have not yet submitted their project plans to benefit from the RAMP scheme,” the official said.

The RAMP scheme, launched in collaboration with the World Bank in 2022, aims at strengthening institutions and governance at the Centre and State, improving Centre-State linkages and partnerships and improving access of MSMEs to market and credit, technology upgradation and addressing issues of delayed payments and greening of MSMEs.

An email query sent to the MSME ministry did not elicit any response by the press deadline.

Out of the total outlay of Rs 6,062.45 crore of the scheme, the World Bank is contributing Rs 3,750 crore while the remaining Rs 2,312.45 crore will be funded by the Indian government. The official said that the government has approved 283 projects amounting to Rs 2,500 crore with Rs 1,100 crore already disbursed.

The SIP includes an outreach plan for the identification and mobilisation of MSMEs under RAMP, identifying key constraints and gaps, setting milestones, and projecting the required budgets for interventions in priority sectors, including renewable energy, rural and non-farm business, wholesale and retail trade, village and cottage industries, women enterprises, etc.

“This is the first time the government is focusing on small entrepreneurs to increase capacity building. RAMP will solve the financial constraints for MSMEs. With this, they are building capacity for lakhs of entrepreneurs. Many state governments have submitted their SIPs, and the committee has scrutinised some of their points. Still, many states have yet to submit; hopefully, they will do so sooner,” said Vinod Kumar, President of the India SME Forum.

Further, for day-to-day implementation, there will be program management units at the national-level and in states, comprising professionals and experts competitively selected from the industry to support the MSME ministry and states in implementing, monitoring, and evaluating RAMP programs.

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

“The scheme aims to foster a favourable environment for MSMEs to flourish, thus playing a crucial role in strengthening India’s economy and generating employment opportunities,” said Ranjeet Mehta, Executive Director at PHD Chamber of Commerce and Industry.

The Department of Economic Affairs (DEA), in the 97th Screening Committee meeting, approved the preliminary proposal on RAMP.

This was followed by missions, extensive consultations with states and other stakeholders, and technical and fiduciary assessments conducted by the World Bank.

Thereafter, an Expenditure Finance Committee (EFC) Note was prepared and circulated to concerned line ministries/departments for their comments. The EFC discussed the note in its meeting held on March 18, 2021, and recommended the proposal for consideration by the Cabinet.