During the Union Budget 2022-23 presentation, the finance minister Smt Nirmala Sitaraman announced that RAMP programme is to be rolled out at an estimated cost of Rs 6,000 crores. The programme is to be implemented for 5 years.

About the programme

RAMP is a post COVID resilience and recovery programme. It aims to improve the condition of MSMEs in India. The MSMEs were badly affected due to COVID pandemic and lock down. It provides better access to finance to the MSMEs.

Significance of RAMP programme

The programme will increase the productivity of MSMEs. Also, it will increase the competitiveness of MSMEs. It will revitalise the MSME sector.

Need for RAMP

40% of MSMEs in India lack access to finance. MSMEs are the backbone of Indian economy. They contribute 40% of exports of the country and 30% of its GDP.

World Bank and RAMP

In 2021, the World Bank said that the RAMP programme is to mobilize finance of 15.5 billion USD. It is to improve the performance of five lakh MSMEs. In 2020, the World Bank approved 750 million USD loan to the MSMEs in India. Later in 2021, the World Bank provided 500 million USD to boost the MSMEs in the country. This benefitted 5 million MSMEs.

How will RAMP benefit the MSME?

It will unlock the liquidity issues. Currently, the lenders are concerned about the repayment by the borrowers. This is limiting and decreasing the flow of credit into the MSME sector. The programme will de – risk the lending from non – banking financial institutions and banks. It will strengthen small finance banks. It will increase the funding capacity of market oriented channels. It will boost refinancing facilities of GoI. Only 8% of MSME are served with credit flow currently. RAMP will incentivise fintech and will increase the digital lending and borrowing. This will increase the cash flow in the country.

Way Forward

The MSMEs are in the centre of economic recovery. The immediate need of the moment is to make sure the liquidity being infused into the economy reaches the MSMEs.