Covid-hit MSMEs get Rs 6,062-crore boost
The Cabinet has approved a $808-million (Rs 6,062-crore) support to revitalise Covid-hit micro, small and medium enterprises (MSMEs) through a programme backed 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 the Raising and Accelerating MSME Performance (RAMP) programme, announced in Budget for FY23, will be extended over five years.
The programme aims at improving access of MSMEs to market and credit while bolstering institutions and governance related to the small businesses at the central and state levels. According to the World Bank’s assessment, over 40% MSMEs in India lack access to formal sources of finance.
An official statement after the Cabinet meeting suggests RAMP will address the generic and Covid-related challenges being faced by MSMEs by enhancing the impact of existing schemes for such entities and improving their competitiveness. Further, the programme will bolster the capacity of MSMEs, improve the skill sets of employees, help them upgrade technology and adopt sound marketing strategy, among other things.
RAMP is one of the programmes announced in the latest Budget, as the government acknowledged the need for a protracted period of succour to 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 a year through March 2023 and widened its coverage by Rs 50,000 crore to Rs 5 trillion. To top it up, the Centre will revamp the extant Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) to facilitate an additional credit of as much as Rs 2 trillion.
The additional credit limit of Rs 50,000 crore of the stepped-up Emergency Credit Line Guarantee Scheme (ECLGS), however, has to be used to bolster healthcare infrastructure by lending only to hospitality and related enterprises, finance minister Nirmala Sitharaman had said while presenting the Budget.
The government will also link key portals – Udyam, e-shram, NCS and ASEEM – meant for MSMEs and expand their scope to brighten their business prospects.