Indian MSMEs: Time to be on the world map
Pushkar Mukewar, CEO & Co-Founder, Drip Capital, explains how schemes for Indian MSMEs such as RAMP and CBFTE have the potential to complement the Atmanirbhar Bharat mission by fostering innovation and enhancement in industry standards and practices.
Atmanirbhar Bharat, a pilot project of the Narendra Modi government, has transformed itself since its launch in 2014 from a program aimed at making India self-reliant to one that provides active solutions for the cause. In the latest filip to this initiative, the Raising and Accelerating MSME Performance (RAMP) and the Capacity Building of First-Time MSME Exporters (CBFTE) schemes were launched to extend a helping hand to Indian MSMEs. These initiatives couldn’t have arrived at a better time when India is attempting to capitalize on the changing mindset among world economies seeking new geographies for expansion.
Top global traders, namely the US, China, Germany, Japan, and South Korea, all have high stakes at risk in a dynamically changing global environment. However, the recent critical events, including the Russia-Ukraine conflict and China at loggerheads with the US, can potentially turn the tide for Asian countries, including India. The smart move now would be for India to rise to the occasion and expedite efforts to grab the largest share of the pie. One way this is possible is by hand-holding efforts for Indian MSMEs through schemes like RAMP and CBFTE, which are bound to bring vast opportunities.
The role of RAMP and CBFTE in facilitating Indian MSMEs
According to the data shared by the Minister of State for MSMEs Bhanu Pratap Singh Verma in the Parliament in July’22, the share of micro, small and medium enterprise (MSME) sector in the country’s annual merchandise exports has declined from 49.75% during FY20 and 49.35% during FY21 to 45.04% in FY22
What Indian MSMEs need today is to build capacity, have adequate skills, and enrich their goods and services’ quality via technological upgradation, digitization, outreach, and marketing promotion, coupled with easier access to credit. The RAMP program will help out with this exact requirement and prove to be pivotal in enabling center-state collaboration whilst improving domestic dynamics related to employment and upliftment.
RAMP is an US$ 808 million (INR 6,062.45 crore) World Bank-assisted program aimed at raising and accelerating the performance of Indian MSMEs, which form a third of the country’s total GDP. The scheme strives to address the most critical challenges that Indian MSMEs face. From improving access to market and credit & strengthening institutions and governance at the center and state level, to addressing issues like delayed payments and greening of MSMEs, RAMP will function at the national and state level. With the vision of targeting a total of 5.55 lakh MSMEs, the RAMP program will enable MSMEs to become competitive.
Meanwhile, the CBFTE will work in tandem with revolutionizing the future of Indian MSMEs by encouraging them to offer products and services of international standards for the global market. The scheme will also set India to comfortably park itself as a world leader on the global stage and realize its Atmanirbhar Bharat dream. It will assist first-time exporters with requirements for every stage of the export cycle. From providing financial support, and vocational training to leveraging digitization using advanced technology-led tools, the government intends to aid MSMEs irrespective of what they export.
The government envisages this pilot project will change how MSMEs interact with the world, allowing them to scale greater heights. Additionally, the policy tank believes enhancing Indian MSMEs’ participation in the global value chain is expected to drastically impact the 11 crore people connected with the sector. Moreover, the scheme will help the country achieve the US$ 5 trillion economic target.
Towards a greater global presence
PM Narendra Modi commented last year, “At present our exports are about 20% of GDP. Considering the size of our economy, our potential, the base of our manufacturing and service industry, it has the potential to grow a lot.” Indian MSMEs can play a major role in augmenting India’s exports as the country is home to 1,06,98,583 MSMEs as on 13th September’22. The sector has unremittingly acted as the bulwark for the Indian economy by fostering entrepreneurship and generating large employment opportunities at comparatively lower capital cost, next only to agriculture.
Schemes such as RAMP and CBFTE have the potential to complement the Atmanirbhar Bharat mission by fostering innovation and enhancement in industry standards and practices and providing the necessary technical inputs to MSMEs, making them competitive and self-reliant. The initiatives will help place Indian MSMEs on the world map like never before.
Pushkar Mukewar is the CEO/Co-Founder, Drip Capital. Views expressed are personal.