The Union Cabinet has approved a World Bank-assisted programme worth $808 million to improve the performance of micro, small, and medium enterprises (MSME).
The programme, called 'Raising and Accelerating MSME Performance' - or RAMP - will commence in FY23, the government said in a statement on March 30.
Of the $808 million, $500 million will be a loan from the World Bank, while the remaining $308 million will come from the Centre.
The $500 million 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 RAMP 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," the government said.
Further, the programme will also help scale up implementation capacity and MSME coverage in states. In states where there are fewer MSMEs, the programme will look to "usher in larger formalisation resulting from the higher impact of the schemes covered" under RAMP, the government said.
With the programme, the government hopes to help, directly and indirectly, all 6.3 crore enterprises that qualify as MSMEs. However, 5.5 lakh MSMEs will be "specifically targetted" for enhanced performance.
One of the key components of the RAMP programme will be the construction of Strategic Investment Plans, or SIPs. All states and union territories will be invited to join this plan, which would include outreach for identification and mobilisation of MSMEs, identification of key constraints and gaps, setting of milestones and making projections for funds needed for interventions in certain priority sectors such as renewable energy, rural and non-farm business, wholesale and retail trade, village and cottage industries, and women enterprises, among others.
While the government's statement today made no mention of any specific states on which the programme would focus, the World Bank had said in June 2021 that in addition to national-level activity, RAMP would conduct "targeted activities in five 'first mover' states" of Gujarat, Maharashtra, Punjab, Rajasthan, and Tamil Nadu. However, other states could join in the future.