The cabinet has approved $808 million (Rs 6,062 crore) support to revive the Covid-hit Micro, Small and Medium Enterprises (MSMEs) through a program supported by the World Bank. Of the total assistance, Rs 3,750 crore ($500 million) will be in the form of a loan from the World Bank and Rs 2,312 crore will be provided by the government. The support for Raising and Accelerating MSME Performance (RAMP) program announced in the Budget for FY 2013 will be extended over five years.
The objective of the program is to improve access to market and credit of MSMEs while strengthening institutions and governance related to small businesses at the central and state levels. According to World Bank estimates, more than 40% of MSMEs in India do not have access to formal sources of finance.
An official statement after the cabinet meeting suggests that RAMP will address the general and COVID related challenges faced by MSMEs by enhancing the impact of existing schemes for such entities and improving their competitiveness. In addition, the program will enhance the capacity of MSMEs, improve skill sets of employees, help them in up-gradation of technology and adopt sound marketing strategy, among other things.
RAMP is one of the programs announced in the latest budget, as the government acknowledged the need for long-term support for start-ups and small businesses as they grapple with the devastation caused by the pandemic.
The government has also proposed to extend the validity of its flagship guaranteed loan scheme by one year and increase its coverage from Rs 50,000 crore to Rs 5 trillion till March 2023. To enhance this, the Center will modify the existing Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) to facilitate additional credit of up to Rs 2 trillion.
The additional credit limit of Rs 50,000 crore of the Step-up Emergency Credit Line Guarantee Scheme (ECLGS) is to be used to strengthen healthcare infrastructure by lending only to hospitality and allied enterprises, introduced by Finance Minister Nirmala Sitharaman. Had said. Budget.
The government will also link major portals – Udyami, E-Shram, NCS and Aseem – for MSMEs and expand their scope to brighten their business prospects.