Raising and Accelerating MSME Performance (RAMP)

RAMP is a World Bank supported Central Sector Scheme of the Government of India. It supports the Ministry's wider MSME Competitiveness Programme towards Covid Resilience and Recovery (MCRRP), and aims at improving market access, access to credit, strengthening institutions and governance at the Centre and in the States, improving Centre-State linkages and partnerships, addressing delayed payments, and the greening of MSMEs.

The diagnosis in Chapter 1 is the familiar one: the MSME sector contributes more than 48 per cent of exports, over 30 per cent of GDP and employment for about 111 million people, yet faces physical infrastructural bottlenecks, absence of formalisation, slow technology adoption, gaps in capacity building, poor backward and forward linkages, and lack of access to credit, risk capital and timely payment. The RBI Expert Committee on MSMEs (June 2019) recommended regulatory, financial and implementation reforms; RAMP is the vehicle for carrying a set of those recommendations forward.

The Six Interventions the Programme Encompasses

• •MSME institutional strengthening through, inter alia, the MSME Council, digital portals, and policy and M&E functions.
• •Convergence of relevant State-level schemes and support programmes through preparation and implementation of Strategic Investment Plans (SIPs).
• •Firm competitiveness schemes — technology upgradation and quality certification, marketing support schemes, and capacity building for technology centres.
• •Strengthening the receivables financing market for MSMEs.
• •Enhancing the effectiveness of CGTMSE for greening investments and for women-owned businesses.
• •Addressing delayed payments through online dispute resolution.

Programme Outlay

Programme Objectives

• •Strengthening coordination and institutions at the National and State level.
• •Building and integrating technology platforms.
• •Enhancing firm capabilities and access to markets.
• •Strengthening the receivables financing market.
• •Enhancing guarantee products towards increased greening and gender participation.
• •Expanding access to the Online Dispute Resolution (ODR) mechanism.

The Programme identifies two Result Areas — RA#1: Strengthening Institutions and Governance of the MSME Programme, and RA#2: Support to market access, firm capabilities, and access to finance. Six DLIs sit across them, and each DLI is broken into Disbursement Linked Results (DLRs) with their own allocation. The complete matrix, with the verification protocol for every DLR, is at Annexure 2.

Year-Wise Disbursement Profile (₹ Crore)

All States and UTs are invited to prepare Strategic Investment Plans. Participation begins with a Letter of Undertaking (LoU) in the standard format shared by MoMSME, by which the State commits to conducting a diagnostic exercise, developing a SIP laying out convergence of financing from other sources, and forming the required institutions. All States/UTs that submit the LoU within the stipulated timeline, committing to the stated criteria, are provided financial support of up to ₹5 crore for preparing the SIP. The LoU comes into effect once the State signs and submits it within the stipulated time.

Indicative SPIU Team the ToR Contemplates (Annexure 7)

The PIM describes this as an indicative qualification pack for a five-year period; firms bidding for the SPIU role are advised to deploy sufficient human resource to deliver the tasks and to quote accordingly.

The SIP lays out a plan for a four-year period (FY 2023-24 to FY 2026-27), results-based, with budgeted MSME support. It requires formulation of milestones developed by the State and approved by the Ministry, and financial assistance is disbursed to States based on achievement against those agreed targets. The SIP is expressly meant to be an evolving document that can be updated periodically as context, evidence and implementation experience change.

What the SIP Must Contain

• •Identification of key constraints and gaps in interventions in priority sectors — including renewable energy, rural and non-farm business, wholesale and retail trade, village and cottage industries, and women enterprises.
• •Output-outcome milestones finalised with baseline numbers and Programme goals.
• •Budgeting and prioritisation of those interventions over four years — drawing on existing MoMSME schemes, State MSME schemes and RAMP budgets.
• •An outreach plan for identification and mobilisation of MSMEs, based on national priority items including employment creation potential, the PLI ecosystem, utilisation of local raw material, Industry 4.0, deepening of global value chains and enhancing exports.

The Diagnostic Exercise Behind It

The SIP rests on an evidence-based diagnostic covering the number of MSMEs and growth trend, geographical spread and concentration, sectoral distribution, presence of women-headed MSMEs, performance on employment, output, value added, productivity and size distribution, exports and GVC participation, and PSEs and large private anchor buyers with their MSME vendors. Constraints to be mapped include access to inputs and skilled labour, technology, credit, markets and product standards, regulatory costs, quality infrastructure and testing facilities, management capacity, energy efficiency, and outcomes for women-owned MSMEs. The plan must also establish M&E arrangements aligned to the RAMP Results Framework and the relevant DLIs.

Data may be drawn from the Census and National and State statistical surveys (Annual Survey of Industries, Survey of Unincorporated Enterprises, Economic Census), private surveys, State administrative data, GST data, Udyam Registration data, DGCIS trade data and National and State Accounts Statistics. Stakeholder consultation is expected with MSMEs, business associations, associations of women entrepreneurs, financial institutions, nodal technical institutions, BDS providers, DICs, municipal authorities, Skill Development Missions and the State Rural and Urban Livelihoods Missions — and, importantly, with anchor buyers, to identify supply chain capacity issues.

Excluded Activities

RAMP excludes any activity likely to have significant adverse environmental or social impacts that are sensitive, diverse or unprecedented. It also excludes procurement above the following per-contract thresholds:

The State Government may hire a suitable agency to undertake the diagnostic, support stakeholder dialogue and prepare the SIP to the prescribed template, but the State Government leads and provides oversight. The SIP is approved by the State Level Programme Committee for RAMP before submission to MoMSME. Evaluation is undertaken by the RAMP Programme Committee (RPC), on the recommendation of the SIP Evaluation Committee (SIPEC).

The Scoring Grid for Selecting a Project or Scheme for Funding

The final decision on selection rests with the RPC on SIPEC's recommendation, and the RPC additionally weighs the project's uniqueness, its importance for the State, whether the expenditure is recurring or non-recurring, and fund availability.

How the Money Then Flows to the State

• •MoMSME supports SIP implementation in two ways — deployment of existing MoMSME schemes supported by RAMP, and part-financing for SIP activities not covered by those schemes. Financing of the existing schemes follows those schemes' own guidelines.
• •Part-financing is allocated from the RAMP budget head and transferred to the State's SNA as Grant-in-Aid.
• •Advance released to States for selected SIP proposals under Tranche 1 is up to 50% — amended per the decision of the RPC in its 5th meeting dated 10 November 2023.
• •States are expected to converge financing from other sources as set out in the SIP, so the effective quantum going into MSME development through the SIP process is likely to be considerably higher than the RAMP contribution alone.

The Practical Route From Interest to Sanction

1. 1Letter of Undertaking: The State/UT submits the LoU in MoMSME's standard format within the stipulated time, committing to the diagnostic, the SIP, and formation of the SRPC, SNA and SPIU. On this, support of up to ₹5 crore for SIP preparation is released, routed through the CNA.
2. 2Constitute the institutions: State RAMP Programme Committee under an officer not below Principal Secretary (Industries); a State Nodal Agency, preferably the State Industrial Development Corporation, with a separate budget line; and an SPIU selected through competitive bidding or nomination against the Annexure 7 ToR.
3. 3Diagnostic and SIP preparation: A participatory, evidence-based diagnostic using desk research, structured stakeholder consultations, focus groups and surveys, feeding a four-year costed plan with baselines, milestones, an outreach plan and M&E arrangements aligned to the RAMP Results Framework.
4. 4State approval, then submission: The SRPC reviews and approves the SIP, and the State submits the approved SIP to MoMSME within the stipulated time. Modifications later follow the same route — submission, SIPEC review, RPC approval.
5. 5SIPEC screening and RPC approval: SIPEC screens and evaluates against the 100-mark grid; the RPC approves, lists the projects and interventions for part-financing, and approves budgetary transfers.
6. 6Implementation, reporting, next tranche: The State implements and supplies DLI-wise M&E data to NPMU monthly. Progress is monitored every six months by the NPMU, or as decided by the RPC, with annual reports in MoMSME's template. For subsequent-year funds the State submits implementation data against annual targets plus utilisation certificates, contract management reports and audit reports; NPMU checks and places these before the RPC, which assesses and approves the next year's transfer.

Chapter 6 sets out the suggested implementation steps to achieve results, DLI by DLI; the Ministry periodically reviews these and takes the requisite approvals from the RPC. The Programme Action Plan is at Annexure 10, which assigns each action a source, a responsibility, a timing and a completion measurement.

National Level

State Level

Monitoring, Evaluation and the Digital Spine

The Programme contemplates one baseline survey, two evaluations during implementation and one final evaluation at the end, which may be carried out by an independent M&E agency appointed by NPMU and which include Randomised Controlled Trial methodologies. These focus on enhancing firm capabilities and market access (productivity growth), guarantee products (gender and greening outcomes), building and leveraging State capacity, addressing delayed payments through ODR, improvement in access to finance, and MSME access to factoring.

The Integrated National MSME Digital Portal (INMDP) is to be delivered by an implementation agency selected through a detailed RFP in the first year, preceded by a Digital Blueprint Report on interoperability. It is to integrate all MoMSME portals and platforms; all State platforms offering MSME services; the national portal of the Department of Financial Services covering GoI credit-linked programmes; the NCS and e-Shram portals of the Ministry of Labour and Employment; Samadhaan, GeM, TReDS and CERSAI; msmemart.com; the DFS SAHAY app; and the ASEEM portal of the Ministry of Skill Development and Entrepreneurship — with dashboards for analytics and monitoring and a feedback and rating system for service providers.

MoMSME is responsible for overall implementation and supervision, and must ensure that procurement and financial management functions are carried out appropriately by the NPMU, the SPIUs under State Industries / MSME departments, and participating public and private sector Implementing Agencies, as per the General Financial Rules, 2017. The Ministry provides reasonable assurance to stakeholders and to the Bank that funds are used for intended purposes.

Expenditure Framework — the FY 2022-23 Budget Lines

Programme funds are budgeted in existing scheme budget lines and/or a separately created RAMP budget line, on the basis of annual work plans approved by the RPC. Amounts spent against the mapped object heads constitute 'Programme Expenditure'. The BE for FY 2022-23 mapped in Chapter 8 totals ₹723.00 crore, spread across establishment; the MSME Champions Scheme (Lean, Design, ZED, Incubation, IPR, Digital MSME); Procurement and Marketing Support and Marketing Assistance Schemes; the International Cooperation Scheme; infrastructure development and capacity building; research, evaluation, survey, studies and policy research; and the RAMP National and RAMP States heads. The largest single lines in that year are Professional Services under RAMP States (₹167.54 crore) and under RAMP National (₹81.94 crore), followed by Grants-in-aid General under the MSME Champions Scheme (₹178.05 crore).

Cabinet-Approved Scheme-Wise Expenditure Framework (Annexure 3, ₹ Crore)

The five specific MoMSME schemes focused for impact enhancement and supported under RAMP are the MSME Champions Scheme; Procurement and Marketing Support and Marketing Assistance Schemes; the International Cooperation Scheme; Survey, Studies and Policy Research; and capacity building for Technology Centres.

Flow of Funds

• •Funds are disbursed through the Public Financial Management System (PFMS) per extant GoI procedures. The Ministry of Finance guidelines on fund flow for Central Sector Schemes dated 9 March 2022 are reproduced at Annexure 12 (Treasury Single Account and Central Nodal Agency).
• •MoMSME designates a Central Nodal Agency (CNA); States designate State Nodal Agencies, which open a Central Nodal Account for RAMP in a scheduled commercial bank authorised to conduct Government business.
• •Implementing agencies below are designated Sub Agencies and mapped to the respective SNA account. Bank accounts of consultants and vendors engaged by the SPIU and by implementing agencies are mapped to the respective SNAs, and payments flow from SNA to Sub Agencies and onward.
• •Payments are made by the Pay and Accounts Office of MoMSME against approved activities and booked as expenditure under the scheme-specific 15-digit budget code. The entire transaction trail of releases and payments is captured in PFMS.
• •Accounting at MoMSME is done in PFMS by the office of the Chief Controller of Accounts. States maintain books through the Industries / MSME department; participating agencies maintain books as prescribed by the Act and rules governing them — Companies Act, Societies Registration Acts, or their own statute.

Procurement

• •Procurement of goods, non-consultancy services and consultancy services follows GFR-2017 and subsequent amendments, together with GoI office memoranda on procurement and contract management. The PIM states plainly that the procurement chapter is a guideline document and, in the event of any discrepancy, GFR and related orders supersede.
• •Annual Procurement Plans aligned to the allocated annual budget are required; procurement is carried out through e-procurement systems, with the GeM portal as the preferred option for commonly used goods and services.
• •MoMSME issues a Sanction Order setting out the activities; grants are transferred against it. If an implementing agency fails to utilise the grant for the sanctioned purpose or breaches the conditions, it must refund the grant per the Sanction Order or GFR. Agencies may not divert grants or entrust execution to another institution.
• •Standard bid and contract documents — the GoI model tender documents for goods and non-consultancy services — must be used consistently at Central and State level, with the World Bank's Anti-Corruption Guidelines annexed to the procurement documents and their applicability explicitly mentioned. The ACG protocol is at Annexure 8.
• •Expected RAMP-funded procurement includes equipment and machinery; technical advisory services and technical partners for the MSME Champions schemes; research and studies; workshops, seminars, conferences and exhibitions; capacity building; incentives and awards; development and maintenance of digital platforms; consultancy for training; preparation of DPRs; and technical assistance for LEAN, zero defect production, bar coding and ISO certification.

Environmental and Social Systems Assessment

An ESSA was undertaken to review the capacity of existing national systems to plan and implement effective environmental and social impact management. Because of COVID-19 travel restrictions it was conducted through review of policies, legislation and institutional roles, virtual interviews with government officials and industry representatives, and online consultations with CSOs. It was developed in consultation with MoMSME and States including Tamil Nadu, Maharashtra, Gujarat, Punjab and Rajasthan, with virtual consultations with nodal and district-level representatives on 3 December 2020. The report was disclosed by MoMSME on 24 November 2020 and by the World Bank on 2 December 2020.

Findings: The Programme is expected to have environmental benefits through RECP and green investment interventions, and environmental legislation and institutional structures exist at national and State level. However, environment-specific capacity building was found insufficient, nodal environmental officers find compliance challenging, and many MSMEs are unaware of their environmental impact, of technological solutions, or of their regulatory obligations — with a substantial gap between environmental aspiration and environmental performance. On the social side, policies and procedures at national and State level were found adequate, promoting decentralised planning and safeguarding the interests of vulnerable sections, though inter-State variation and last-mile delivery remain challenges. The Environment and Social Risk Rating of the operation is Moderate.

Mitigation inputs to the Programme Action Plan cover labour management and occupational health and safety oversight; strengthening and convergence of State MIS systems; strengthening feedback and grievance redressal at State and district level; land management; awareness and training programmes especially for women entrepreneurs; MoMSME leading preparation of a "Strategy to Strengthen Environment and Social Management"; and integration of M&E with E&S due diligence. As a PforR operation, the project excludes activities with large-scale land-related impacts, and this criterion is built into the screening mechanism for RAMP-supported investments and through the SPIUs. The Champions portal is noted as the existing grievance redressal architecture, requiring deeper State-level penetration.

Funding Pattern in One Paragraph

GoI provides Programme funds to the Ministry through its budget; the Ministry pre-finances expenditure through the identified budget lines; the World Bank reimburses on IVA-verified DLR achievement, with disbursement requests routed through the Controller of Aid, Accounts and Audit on the Bank's e-Business platform. For States, part-financing flows to the SNA as Grant-in-Aid, with a Tranche 1 advance of up to 50% on selected SIP proposals, and subsequent-year transfers approved by the RPC after NPMU has checked the State's progress data, utilisation certificates, contract management reports and audit reports.

Results Framework — the Numbers the Programme Is Judged On (Annexure 1)