HIGHLIGHTS:
- RAMP programme would be implemented at a cost of Rs 6,000 crores.
- Smt Nirmala Sitaraman, the finance minister, declared during the introduction of the Union Budget 2022-23.
- The initiative will be implemented for a period of five years.
What is in the News?
Smt Nirmala Sitaraman, the finance minister, declared during the introduction of the Union Budget 2022-23 that the RAMP programme would be implemented at a cost of Rs 6,000 crores. The initiative will be implemented for a period of five years.
Concerning the programme
RAMP is a post-COVID recovery and resilience programme. Its goal is to enhance the situation of India’s SMEs. The COVID pandemic and lockdown had a significant impact on MSMEs. MSMEs have easier access to capital as a result of this.
The RAMP Program’s Importance
MSMEs’ productivity will rise as a result of the programme. It will also improve the competitiveness of MSMEs. The MSME sector will be revitalized as a result.
Need for RAMP
In India, 40% of MSMEs do not have access to capital. Small and medium-sized businesses, MSMEs constitute the backbone of the Indian economy. They account for 40 percent of the country’s exports and
30 percent of its GDP.
RAMP and the World Bank
The World Bank estimates that the RAMP programme will raise $15.5 billion in funding by 2021. Its goal is to boost the performance of five lakh small and medium-sized businesses. The World Bank has authorised a 750 million dollar loan to India’s SMEs in 2020. In 2021, the World Bank will provide 500 million dollars to help the country’s MSMEs. This helped 5 million small businesses.
How would RAMP help small businesses?
It will resolve the liquidity problems. Currently, lenders are concerned about borrowers’ ability to repay their loans. The flow of credit into the MSME sector is being restricted and reduced as a result of this. The scheme will reduce the risk of non-bank financial institutions and banks lending. Small financing banks will be strengthened as a result. It will boost market-oriented channels’ funding capacity. It will improve the Government of India’s refinancing capabilities. Only 8% of MSME are now serviced with credit flow. RAMP will boost digital lending and borrowing by incentivizing fintech. This will improve the country’s cash flow.
Next Steps
The micro, small, and medium enterprises (MSMEs) are at the heart of the economic recovery. The most pressing need at the time is to ensure that the cash injected into the economy reaches MSMEs.
